The crypto market is consolidating rather than falling

Market overview

The crypto market capitalisation has risen by 0.9% to $2.15 trillion over the past 24 hours, with gains broadly distributed among the most popular altcoins. In the short term, this looks more like a technical rebound within a broader consolidation near the 200-week moving average than a full-fledged reversal. Nevertheless, relatively small coins such as SushiSwap, Cosmos, and Official Trump have led this rebound, gaining 6%, 5%, and 4.6%, respectively. The underperformers were Aptos (-3.2%), Algorand (-2%), and Zcash (-1.6%).

Bitcoin is trading on the cusp of $63K, which is below the consolidation zone seen in the early months of this year. This positioning points to the bears’ formidable strength. On the other hand, the market did not enter a nosedive, having dipped below the previous support line while avoiding the cascading spiral of stop-loss orders being triggered, as was the case last October or February. Bitcoin has also changed its reaction to sell-offs in risky assets, effectively holding and building positions during the sell-off in tech stocks.  

News background

Despite the short-term rebound, market structure and on-chain data do not yet confirm the formation of a sustained uptrend, according to CryptoQuant.

Bitcoin remains vulnerable to further declines, as a solid bottom has yet to be established, according to Wintermute. There is still insufficient demand from large investors for the leading cryptocurrency, amid capital outflows from spot Bitcoin ETFs.

Bitwise believes that Bitcoin’s recent decline reflects broader trends in financial markets and is not solely attributable to issues within the crypto industry. BTC may react to changes in global financial market conditions sooner than traditional assets.

Investor sentiment towards Ethereum has turned sharply negative on social media, suggesting an impending trend reversal, Santiment points out. In the past, such periods of peak fear and uncertainty have often preceded an asset’s rise.  

Summary: The crypto market has rebounded, but the trend remains weak: BTC is at $63K, demand from large investors is low, and the negative sentiment towards ETH may hint at a reversal.