Following a strong week of gains by leading coins, Bitcoin, Ethereum and a number of other big-cap cryptos, the cryptocurrency market capitalisation has eventually surpassed the important $1 trillion mark, its highest since June 13.
This is important because, after weeks of a market downturn, uncertainty, and volatility, things are now looking positive for the crypto market which has revolved around a $900 million market cap in the last month.
According to data from Coinmarketcap at press time, total market capitalisation is sitting at $1.02 trillion. Major digital assets like Bitcoin, Ethereum, BNB and Solana are also in the green zone.
As it stands, we have seen a 10.34%, 41.56%, 15.49% and 29.14% increase respectively in the last seven days.
Cause of this rise
A major catalyst that has helped in the crypto market cap recovery has been the significant price rise of Ethereum. The second largest crypto by market cap has a date for its highly anticipated event, “The Merge” and its recent bullish tendencies have rubbed off on other smart contract platforms in the space.
Also, Bitcoin’s recovery to above $22,000 yesterday has had a significant impact on the market value. The flagship asset is known to be a market mover, and if it continues to grow, it is expected that market sentiment will recover more.
Following the positive market outlook, the sentiment of crypto investors has begun to shift. A way to determine this is by reading the crypto Fear & Greed Index. This index uses data from five different metrics to present a figure that represents how investors are feeling about the market.
For the most part of June during the intense sell-off that led to the market crash, the index was in the ‘Extreme Fear’ territory. Investors took a step back from the market and the market closed out the month with one of the lowest scores in the interest of the index with a 6.
Now, some cryptocurrencies in the market have recovered and such has the market sentiment. Aa at press time, the Fear & Greed Index sits at a score of 30. This is an increase of 24 points from last month’s close. This indicates that feelings about the market has moved from the ‘Extreme Fear’ zone to ‘Fear’.
As a result, indications fromresearch firm Santiment has shown that there is an increase in Bitcoin whales’ activity. According to a Twitter post late yesterday, large investors have been triggering network activity as they seem to accumulate BTC at its current levels.
“About three hours ago, the amount of #Bitcoin transactions valued at over $1m spiked to its highest value in over a month. Whale moves are busy today, and spikes such as this one can often be a precursor to price direction shifts.”
The recent profits are coming as a relief for crypto investors after a preceding nine months that have seen them endure a terrible bear market. Owing to the downturn, the market capitalisation value has dipped by about $2 trillion and several crypto companies, including Celsius, Voyager Digital, and Three Arrows Capital, have gone bankrupt.
Flagship asset, bitcoin is currently trading at $21.757. It attempts to break above the $22,000 price mark has been unsuccessful for over five weeks. We are watching to see if Bitcoin will be able to scale this bar or continue to fluctuate between the $19,000 and $22,000 mark.
Meanwhile, data from crypto analytics firm Glassnode has shown that bitcoin holders are increasingly unwilling to sell at the current low price. Hence, market entry is notably restrained. According to a tweet by the firm over the weekend:
“Over 80% of the total USD-denominated wealth invested in BTC has been hodled for at least three months.”
In sum, experts believe that since Bitcoin has been able to weather a LUNA and DeFi-induced liquidity crisis – the two largest capitulation events for BTC by volume loss since 2011 – the worst risk has been flushed out of the system, then a massive rally maybe imminent.
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