The entire cryptocurrency market has been in a bearish trend over the past few weeks, and its flagship asset, Bitcoin, has fallen below its previous bull cycle peak of $19,511, which has never happened before.
However, this week the market appears to be rebounding and crypto market capitalization has recovered about $129 billion in the last five days, putting the entire market cap back to $895 billion, up from its lowest point of $766 billion.
The majority of digital assets are also recovering, with Bitcoin (BTC) rising back above $20,000 and moving closer to $21,000. Notably, Bitcoin’s price at the time of writing is $20,862, up 5% over the past day. Furthermore, the top cryptocurrency reversed its intraweek loss.
Major assets including Ethereum, Solana (SOL), Polkadot (DOT), Ripple (XRP), Cardano (ADA), Binance Coin (BNB), and Avalanche (AVAX) have all increased from their lows in proportions of 28%, 42%, 20%, 14%, 12%, 24%, and 28%.
The market surge has caused a sizable volume of liquidation as traders lose their bets that the price of Bitcoin and other cryptocurrencies will decrease in the next 24 hours. Short order liquidations make up 67.74 percent of all liquidations according to data from Coinglass.
44,800 traders from all around the world cancelled their futures trades, amounting to a total liquidation of nearly $120 million, in the last 24 hours.
The cryptocurrency market has had widespread adoption and success, moving up the rankings of the financial markets, but investors have experienced their fair share of setbacks in recent months.
The crypto market is still reeling from the effects of Luna’s collapse in May and lender Celsius stopping withdrawals and transfers a week ago, and fears of market contagion continue to undermine its confidence and determination.
The most immediate threat to markets continues to be the Fed’s quantitative tightening and regulation, and investors are obviously staying away from high-volatility assets, making it tough to predict a local bottom at the moment.