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Total crypto market cap falls below $1T for first time since January 2021

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The total global market capitalization of all cryptocurrencies fell below $1 trillion for the first time since January 31, 2021.

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In the early hours of June 13, the value fell below the benchmark by about $6 billion, bringing the total value of all cryptocurrencies to just $994 billion.

crypto market capitalization
Source: Cryptooshala coin rating.

Some basic levels of technical analysis

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Cryptocurrency markets are steadily declining after the announcement that US inflation hit a record 8.6%. Bitcoin has broken through the $27K support and is currently trading at around $24,300 at the time of writing.

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For those interested in technical analysis, there was no significant level of support until the 2018 all-time high of $19,930. However, this has never been tested as a support. Some may see the $9,200 lower value as the next major support level to be tested and held on previous occasions.

bitcoin june 2021
Source: Trading View

Flight to safety

However, while technical analysis is regularly used by day traders, it is often difficult to spot trends when looking at the macro environment. The charts do not know or understand inflation, war, public sentiment, or what is currently in the news cycle. As investors seek safe haven during an increasingly bleak global economic outlook, the cryptocurrency markets are looking markedly riskier.

The collapse of the Terra ecosystem, ongoing concerns about Tether support, the halt of Celsius withdrawals, countless NFT hacks, multiple DeFi exploits, and knowledge of the historical cyclical nature of cryptocurrencies will all influence investor thinking when assessing risk tolerance. The outlook for the cryptocurrency in the short term may look bleak given the amount of negative press due to the onslaught of recent bearish events.

However, people involved in cryptocurrencies are more optimistic than ever. Hasib Qureshi, Managing Partner at Dragonfly Capital, said:

“It’s hard to be bearish after seeing the energy of Consensus. The macro will become the macro, but there are so many brilliant people in web3 that a lot of problems will be solved over the next few years.”

RanNeuNer from Crypto Banter also commented:

“Going through the Consensus this year and comparing it to all the previous ones, you quickly realize how popular cryptocurrency is becoming! This is happening much faster than we think!”

New world

We will be entering unknown territory if bitcoin falls below the previous all-time high of the latest halving cycle. While the cryptocurrency market has plummeted in the past before recovering exponentially, Bitcoin has never fallen below the previous cycle’s all-time high before.

Also, falling below critical levels like $21,000 could create problems for whales like MicroStrategy who will have to increase their positions to avoid a margin call.

Crypto winter is historically hard to bear and the current bear market may be no different. The future of cryptocurrencies looks bright as companies like Andreessen Horowitz recently announced a $4.5 billion fund to take advantage of discounts as prices fall.

A lot of money is still flowing into crypto projects, even if current prices do not reflect the optimism of those working behind the scenes.





Credit : cryptoslate.com

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