The cryptocurrency market appears to be on the upswing again, with an albeit minor influx of capital that once again pushed the overall capitalization above $1 trillion. The capital inflow was notably fueled by a rise in major assets such as Bitcoin (BTC) and Ethereum (ETH).
The market crosses again this symbolic bar
Total cryptocurrency market capitalization as of July 28 was $1.052 billion, gaining $70 billion, up 7% in the past 24 hours, according to data from CoinMarketCap.
Total crypto market capitalization over the last 24 hours (source: CoinMarketCap)
The crypto market crosses the $1 trillion mark
The market seems to be influenced by the major cryptocurrencies which have risen strongly in the last 24 hours. For example, Bitcoin is trading at $23,000 with gains of over 7% over that same time frame.
This price move can be seen as a positive sign for the market’s flagship crypto, whose resurgence above $20,000 looked shaky at the start of the week. However, many experts are calling for caution.
What next move for Bitcoin?
With Bitcoin strongly influencing the entire market, its ability to support the current rally will be crucial for the sector. It should be noted that Bitcoin is still trying to maintain sustained bullish momentum after several failed attempts to break above $20,000 sustainably.
The second largest cryptocurrency by capitalization, Ethereum, maintained its bullish momentum, trading at $1,600, up more than 10% in 24 hours. The blockchain, a leader in smart contracts, seems to be maintaining its gains after announcing the date of the highly anticipated Merge for the end of September.
This upgrade will allow Ethereum to move from the Proof-of-Work (PoW) protocol to a Proof-of-Stake mechanism. Interestingly, this development also saw positive price movement among related assets like Ethereum Classic (ETC), the original version of Ethereum.
Besides Bitcoin and Ethereum, we also see that Quant and Ethereum Classic are among the assets that recorded the biggest gains this week.
What does this return above the trillion dollars mean?
Reclaiming a market cap of $1 trillion can be seen as a positive sign in this complicated time for the crypto market. However, with the recent correlation to the equity market, the end of the crypto bear market may face challenges, especially with macro trends like runaway inflation, nearly 9.1% in the US YoY. For the month of June, which does not seem ready to stop.
Interestingly, most cryptocurrencies rallied after the US Federal Reserve raised its benchmark interest rate by 75 basis points. We see that contrary to the usual pattern, we have not seen a pullback after these announcements by Jerome Powell and the FED. Some observers point to the fact that investors were probably expecting a larger rate hike and therefore welcomed these announcements positively.
In addition, the market will have to deal with new announcements that are expected to arrive in the regulatory space. In particular, we learned this week that the Securities Exchange Commission (SEC), the US regulatory policeman, has launched an investigation into the crypto exchange Coinbase to find out if the platform offers unregistered securities.
An accusation firmly denied by one of the largest exchanges in the world which has been experiencing many difficulties in recent weeks, between insider trading, loss of market share, flop of its NFT marketplace, or even accusations of bankruptcy!
The next few weeks will be decisive for the crypto market and many observers prefer to remain cautious in the face of this buying push in the crypto market.
For Bitcoin, it will be necessary for particular to succeed in extracting itself from this range with power to hope to reverse a downward trend over the long term.
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