Crypto fell below the total market capitalization of $1 trillion and returned to January 2021 levels. At that time, the sector was preparing for a massive bullish contest that would have its market capitalization in excess of $3 trillion.
This time it seems that the sector is threatening more losses and a possible new drop to the levels of 2020. At the time of writing, the total cryptocurrency market capitalization has reached $870 billion and it continues to trend downward on the daily chart.
Analyst Justin Bennett believes the sector will decline “imminently”. The market is expected to find support at $730 billion because it was unable to hold above the $860 billion level.
Current market conditions, the shift in Federal Reserve (Fed) monetary policy, ongoing selling pressure, and a string of negative news in the space seem to support this thesis. Sharing the chart below, Bennett He said:
The next leg looks imminent. This is where we will most likely go. Another 15-25% to reach the total confluence of the support and the measured target. Expect a 30% drop for most cryptocurrencies.
As usual, Bitcoin holds the key to the entire crypto sector as most altcoins tend to follow the BTC price movement. Bennett claims that the number one cryptocurrency in the market could see a similar drop of 15%-25% if it breaks the $20,000 area.
This will send BTC price to the next critical support area around $19,850 and for the first time in its history below the previous all-time high.
On the lower time frames, the data from the Indices of Materials (MI) recorded more than $15 million in buy orders for BTC at $20,000. In the opposite direction, there is about $9 million in bids around $20,900 which could act as resistance in the short term.
Will bitcoin bounce back with the stock market?
The benchmark cryptocurrency has been moving in tandem with traditional stocks, mainly the Nasdaq 100 and Standard & Poor’s 500 Index. According to Joren Timmer, macro director of investment firm Fidelity, the S&P 500 has reached oversold levels. he is He said:
SPX Weekly Stochastics: It is oversold, consistent with the major bottoms. I don’t think we’re there yet, but we could get close. We are only 1 P/E point away from the fair value.
Related reading | TA: Bitcoin still in a downtrend, risk of falling below $20K
If stocks find a bottom soon, Timmer claims, Bitcoin and the crypto market could bounce back and prevent the Bennett scenario. The decline in traditional financial resources has led to a capitulation event, as shown below, which could play in the favor of digital assets.
A quick look at the technical stuff: The signs of giving up are emerging. We can see it here… 1/ pic.twitter.com/1SSYFCj8ir
– Joren Timmer (@TimmerFidelity) June 17, 2022