The crypto market shaves off $50 billion in one day as the reversal begins
The crypto market has now seen more than $50 billion lost in a one-day period as the market lost its recovery streak. This had been expected for the market due to the large recoveries recorded in a short time. This has brought down the crypto total market to an important level.
The crypto market falls below $1 trillion
Bitcoin and Ethereum’s remarkable recoveries last week had done enough to push the entire market higher. As a result, the crypto market quickly added more than $100 billion during this time. That had pushed the total market capitalization over $1 trillion again, to much cheer among crypto investors.
Related Reading | Ethereum Weekly Exchange Net Flow Points to Increasing Accumulation Trend
However, this recovery would prove to be short-lived given that the crashes had been just as fast. Within a day, the crypto market had lost more than $50 billion following the falls and has now lost its grip on its $1 trillion market cap.
Currently, the total crypto market cap is at $944 billion, more than a $100 billion loss from where it was last week. The pattern of losses in recent days now sees cryptocurrencies in the space testing a key support level and mostly failing to hold.
Bitcoin has since lost its footing at $22,000 and is now trading in the low $21,000s, while Ethereum has fallen to $1,400 territory. This has dragged their market values down to $402 billion and $171 billion respectively.
Market sentiment takes a dive
As the crypto market recovered, market sentiment climbed rapidly. For the first time in two months, investor sentiment had managed to break out of the extreme fear zone of sitting in fear. With the continuation of the rally, the sentiment score had increased to close at a new two-month high of 30 last week.
Related Reading | More than 57,000 traders liquidated as Bitcoin sinks below $22,000
Sentiment had been consistently up for the past couple of days until Monday, when prices had started to fall. The drop in sentiment saw the Fear & Greed index return a score of 26 for the last day, indicating that investors are once again becoming skeptical of the market.
Although the bearish trend is not fully established yet, it is gradually becoming the norm during this time. Following historical trends, there will be recoveries and pullbacks, which will see the market establish lower highs and lower lows.
Featured image from CNBC, chart from TradingView.com
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