The crypto market digested the sell-off and moved further up

The crypto market digested the sell-off and moved further up

Market Picture

The crypto market capitalisation returned to its historical highs of $4 trillion (+2.4% in 24 hours), as the pull towards altcoins returned after a slight reboot last week.

Bitcoin, which fell alarmingly on Friday morning, still managed to remain within the range of the last couple of weeks — $116.5- $119.5k. The new week begins with an assault on the upper limit of the range. Breaking through $120K could create a speculative wave of buying.

Ethereum rose to $3925, reaching last year's highs. The main altcoin made three big attempts to break through $4000, but these were followed by declines of a third, almost half and two-thirds. Although this background sounds daunting, it shows a strong history of perseverance. It is quite likely that this time the resistance will be broken. It would be a surprise if we see a rapid rise to the historical highs of $5,000 set at the end of 2021.

News Background

The latest recalculation increased the difficulty of mining Bitcoin by 1.07% to a new record of 127.62 TH/s. Against this backdrop, the network's hash rate exceeded 1 ZH/s.

Galaxy Digital's sales caused Bitcoin's fall below $115,000 at the end of last week. The early investor sold more than 80,000 BTC from the Satoshi era through Galaxy, the company confirmed, calling the deal worth more than $9 billion one of the largest in Bitcoin's history.

Jason Williams, author of Bitcoin Hard Money, notes that the market ‘completely absorbed’ the massive sell-off, indicating the cryptocurrency's readiness to continue growing.

The inflow of capital into cryptocurrencies since the beginning of the year has reached $60 billion, according to JPMorgan. The figure has grown by almost 50% since the end of May and may exceed last year's record. The main sources of inflows are crypto funds, the CME futures market and venture investments.

CryptoQuant CEO Ki Young Ju said that the Bitcoin cycle theory no longer works and admitted that his previous predictions were wrong. Bitwise also concluded that four-year cycles are no longer relevant for BTC. The forces that shaped them have weakened in the new conditions.

The recent Ethereum rally has caused a surge in social media mentions of the crypto. Santiment warns that the indicator has reached a level of ‘extreme euphoria,’ signalling the risk of a correction.

By the FxPro Analyst Team