The attached overview from Coin360 shows the performance of the crypto market over the past 7 days. The total crypto market cap recovered slightly to $2,100 billion.
Thereby, Bitcoin’s market dominance also consolidated around 40%. Number 2 Ethereum (ETH) also saw its market cap consolidate around $404 billion. Ethereum’s market dominance decreased slightly to 19.2%.
Cryptomarket rebounds from major support level
The accompanying chart of the total crypto market including Bitcoin shows that the cryptos have taken a beating since the top in November.
A whopping $1,000 billion or 33% of market value was wiped out. The main reason for this decline was: risk off. In other words, risky investments were sold off after (some) panic broke out now that the U.S. Fed is hitting the interest rate brake hard.
In addition, inflation is rising significantly. The central bankers have no choice but to adjust their highly accommodative interest rate policy, i.e. raise interest rates and/or tapering (i.e. turning off the money supply).
The correction in the crypto market can be described as “severe”, with the market falling back towards levels seen in October.
The crucial support level of $2,000 billion was subjected to a severe test. For now, this level has held. As long as this is the case, we can still see a recovery towards $2.5 billion and possibly another attack towards last year’s top.
Let’s not get too ahead of ourselves. First see if the support level around $2,000 billion holds up. If so, the future of the crypto market looks a little brighter again.