The cryptocurrency market is seeing modest increases, driven by Bitcoin, after a challenging first half of the year marked by a massive sell-off. A surge in capital flowing into the market emphasizes the gains.
According to data from Tradingview, the total market capitalization of all cryptocurrencies was $824 billion on July 13 and $952 billion on July 17, an increase of 15 percent!
Despite several big bitcoin businesses adjusting their operations and choosing bankruptcy protection due to the general market slump, profits have nevertheless been made.
Celsius, a well-known cryptocurrency loan company, has declared bankruptcy after halting customer withdrawals. The lending company Voyager Digital and the cryptocurrency hedge fund Three Arrows Capital have declared bankruptcy.
Although the market is now growing, it is still lagging behind the gains made in 2018, when Bitcoin reached an all-time high of approximately $68,000, and the total market capitalization of cryptocurrencies reached over $3 trillion.
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Bitcoin continues to rise, surpassing $20,000
In the past 30 days, Bitcoin has also had trouble maintaining gains above the critical $20,000 barrier, occasionally falling below it. The leading cryptocurrency over this time has only seen modest increases of roughly 1.5 percent, and as of press time, it was trading at $21,480.
However, as Bitcoin helps stabilize prices over $20,000, investors keep an eye out for a potential protracted rally. Notably, the $30,000 mark continues to be a crucial psychological threshold. It may reach the $30,000 mark in September, depending on the state of the market.
An optimistic feeling may be seen in the bitcoin market gains, given the persistently rising inflationary environment. When U.S. inflation in June reached a record high of 9.1%, the cryptocurrency market immediately reacted by losing approximately $15 billion in minutes.
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The signs of a market bottom
The question of whether the market has bottomed and is prepared for another bounce is the main concern. Glen Goodman, a cryptocurrency consultant at multi-asset brokerage exchange eToro, thinks the recent negative headlines, especially in mainstream media, imply a bottom even though analysts are divided on the market’s future direction.
Following the significant loss, some mainstream media outlets and analysts declared Bitcoin and the cryptocurrency industry dead and predicted additional correction.
Significant losses suffered by investors and the suspension of critical activities by some crypto-related enterprises have also contributed to negative headlines.
The industry has also experienced controversy, such as the crash of the Terra (LUNA) ecosystem, which caused considerable losses. As a result, the incident seems to have diminished market confidence, particularly in light of suspicions linking the network’s creator, Do Kwon, to the losses.
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Overall, the market is still waiting to see how any crypto legislation will affect it. Most governments have proposed various regulatory frameworks while claiming the need to safeguard consumers.