The cryptocurrency market has been experiencing a sell-off in recent days, causing waves of concern among investors, with the price now trading around $64,000.
The recent volatility has sparked a flurry of activity, with prices fluctuating and presenting potential challenges and opportunities for those interested in capitalizing on the pullback.
Crypto Market Capitalization: How This Liquidation Will Affect You
Of course, the liquidation of the various cryptocurrencies will have a significant impact on the cryptocurrency market capitalization. Bitcoin's dominance over the market capitalization is currently over 52%, while ETH occupies 16.3%. Both have seen downward moves in stocks in recent days, with Bitcoin falling more than 10% in the last week and ETH falling more than 15% in the last seven days.
The current cryptocurrency market capitalization is around $2.43 trillion. However, this week, when cryptocurrencies initially fell on Wednesday, the market capitalization fell as much as 18% from its March highs. That was before the reversals during Wednesday's session, with BTC and ETH currently in positive territory.
Despite the rocky week, analysts at Bernstein said in a recent note that they believe the cryptocurrency market capitalization may reach $7.5 trillion by 2025.
The company stated: “We continue to see an 18-month cross-cycle opportunity with Bitcoin and the entire crypto ecosystem.”
Why is the cryptocurrency market more volatile than usual?
Jonny Huxtable, CEO of LinkPool, told Investing.com that they “see a confluence of factors that are currently impacting the price of Bitcoin.”
“The first is that BTC traditionally struggles to recapture all-time highs from the previous cycle and this cycle is no different,” he explained. “At the end of 2020, it took about 3 weeks for BTC to discover prices and actually get $20,000.”
Huxtable noted that an interesting aspect of this cycle is that Bitcoin never surpassed its cyclical fib of .618 on its first attempt.
“We saw this happen in every previous cycle where it was quickly rejected at every .618 tag, but this time it was different and came as a shock to many traders and analysts,” Huxtable stated. “This is a testament to BTC spot ETFs and the asset managers that oversee them. If there is one thing they are good at, it is diligently making profits.”
Overall, LinkPool anticipates a sideways and halving “cut down” and for some time afterward, similar to the 2015-2017 uptrend.
Huxtable stated: “BTC is seeing more demand than ever, and with its daily production about to be cut in half, we anticipate an unprecedented market reaction to the large supply shock BTC will face to date.”
On the other hand, Nejc Kržan, director of NiceX Exchange, NiceHash, told Investing.com that “we are seeing a natural change in the market at the moment.”
“He believes this is the culmination of several important factors.” On the one hand, many investors who recently entered the market and expected the price of BTC to continue surpassing the all-time high and rising further, have sold to take short positions. term profits,” he explained.
Kržan added: “On the other hand, we have the Federal Reserve and other central banks being much more cautious about cutting short-term rates, which has really tempered the high optimism of the previous month, so investors more larger ones are more cautious with less traditional markets. assets”
He also notes that the BTC-gold correlation is at an all-time high, indicating that “we can expect Bitcoin to follow global markets more closely now that such massive volumes of institutional money are moving in and out of the markets.” ETF. “
Cryptocurrency prices today
Despite an initial drop below $61,000 earlier in the session, Bitcoin is now up 3.8% on the day, trading at $64,256, as of 10:59 ET.
has followed a similar pattern. It fell to around $3,059 earlier in the day, but is now up more than 7% to $3,394.3.
Elsewhere, after falling in the last two sessions, it rose around 3.5% on Wednesday, trading at $175.75.
How to invest in cryptocurrencies
Investing in cryptocurrencies offers several avenues, from direct purchases of cryptocurrencies to investments in crypto funds and companies. Cryptocurrencies can be purchased through specific cryptocurrency exchanges or brokers and, once purchased, can be stored, managed and traded within a cryptocurrency wallet.
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