The crypto market cap is back above $1 trillion after BTC surged above $21,000
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(Kitco News) – Crypto fans were in high spirits on Wednesday as bulls took control of price action and drove Bitcoin higher, helping push the total cryptocurrency market cap back over $1 trillion while traditional markets fell under pressure, taking 3 – day winning streak.
A volatile day in the stock market resulted in lower prices on the day after weak earnings reports from Alphabet and Microsoft, sparking fresh concerns that the economy could continue to weaken in the coming months.
Data from TradingView shows that Bitcoin (BTC) saw its second day of gains, briefly above $21,000 to reach a daily high of $21,026 before retreating to support near $20,700, where bulls look to rally their strength before pushing higher.
BTC/USD 4-hour chart. Source: TradingView
The shift in momentum over the past two days was touched upon by Kitco senior technical analyst Jim Wyckoff, who noted that the Bitcoin price “hit a six-week high in early US trading on Wednesday.”
“Price action this week has seen a large and bullish upside breakout from the choppy and sideways trading range of recent weeks,” according to Wyckoff, who added that “A new price uptrend is now in place on the daily bar chart.”
The sudden move higher has put the bears on the defensive as “bulls now have the firm technical advantage in the near term,” with the current momentum suggesting there is “still more upside price action in the near term,” Wyckoff concluded.
As for traders who believe Wednesday’s rise is a signal to go all-in, as it’s “only up from here,” market analyst Rekt Capital posted following chart and provided a little historical insight to bring those hopes back down to earth.
BTC/USD 1-month chart. Source: Twitter
“While it may be easy to get excited about this recent uptick in BTC’s price action… Macro-wise, BTC is still in its historical lows and hasn’t registered a major breakout yet,” Rekt Capital warnedadding that “BTC needs to break ~$23450 first to see stronger trend acceleration.”
The shorts get crushed
The one group of crypto traders who did not welcome the sight of green on Wednesday were derivatives traders, who have suffered $757 million worth of liquidations on Bitcoin alone in the past 24 hours, according to data provided by Coinglass.
Total liquidations. Source: Coinglass.
Across all cryptocurrencies, the total amount liquidated in trade on Wednesday was $1.43 billion, increasing what was already the highest number of 2022 so far.
An additional warning that today’s move doesn’t mean it’s blue skies from here on out was provided by crypto analyst il Capo of Crypto, who posted the following tweet alerting traders to the possibility of a short squeeze that could soon reverse course.
We’ve seen the biggest short liquidations in the past few months proving this move is a short squeeze and most were positioned on the downside (hence the hate I’ve been receiving lately)
Now it’s time for the lungs to be caught. pic.twitter.com/CxyFBdrPEE
— il Capo Of Crypto (@CryptoCapo_) 26 October 2022
A tale of two markets
The trend of stocks trading higher while cryptos disappeared ended on Wednesday as the majority of altcoins in the top 200 saw gains on the day while the major stock indexes struggled.
At the close of US markets, the S&P and Nasdaq both finished in the red, down 0.74% and 2.04%, respectively, while the Dow managed to eke out a small gain of 0.01% after being up as much as 1 .4% earlier in the day.
Top altcoin Ethereum (ETH) climbed 6.6% higher to trade at $1,561, while popular meme token Dogecoin (DOGE) saw a 15.03% increase to trade at $0.072 at the time of writing.
Daily performance in the cryptocurrency market. Source: Coin360
Other notable altcoin winners include a 24.3% increase for Illuvium (ILV) and a 15.7% increase for Toncoin (TON).
The total cryptocurrency market cap is now $951 billion, and Bitcoin’s dominance rate is 38%.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
