Crypto total market cap is now on January 2021 level
The total capitalization of the cryptocurrency market has fallen below $1 trillion. The last time capitalization took place in this area was in January 2021. What happened after that, crypto enthusiasts will remember well, but we will refresh your memory by looking at the TradingView chart. So what will happen this time?
Is there a capitulation yet?
No matter how much crypto fans want to distance themselves from all the usual and customary patterns of traditional finance, it is worth recognizing that the crypto market lends itself to the standard process of the market cycle.
Briefly describing the market cycle, there are four key stages: accumulation, momentum, distribution and capitulation. The important question in the minds of people who follow the market very closely is whether the capitulation has already begun or do we still have room to fall before we start accumulating?
The subject is complicated. For example, crypto analytics provider Glassnode wrote in its early June review that the market is likely in the final phase of capitulation. Arguments and observations included the facts that the market is trading near the price lows of the 2021-22 cycle, most investors are incurring unrealized losses and miners’ earnings have plummeted. The facts are indeed in place, but since the publication of the review, the total capitalization of the crypto market has fallen another 22%, which is quite a lot.
At $943 billion, we are now $140 billion off the 2021 low, which equates to a further 17% drop. Even if we do not reach these values, the question of what happens next, as posed at the beginning, finds a fairly clear answer. Moreover, in any case, there will be a long, exhausting and exhausting consolidation, but it will be followed by a new dawn and a new momentum in the market.
