Crypto m-cap reclaims Mt $1 trillion. Is it another dead cat bounce?

Synopsis

Bitcoin surged 7 per cent to regain the $20,000 mark, whereas Ethereum jumped on similar lines, flirting with $1,400 levels. These two tokens contribute over 55 per cent to the total crypto m-cap.Meanwhile, altcoins, including Terra’ Luna Classic zoomed about 50 per cent, whereas Uniswap rallied 18 per cent. Stepn, Polkadot, and Aave also gained up to 14 per cent.

New Delhi: After a tough few sessions, crypto tokens found their mojo back on Tuesday as the total market capitalization of the digital assets topped the $1 trillion mark once again.

According to the data from Coingecko, the total market cap of digital tokens was recorded at around $1.01 trillion as of 13.30 hours IST on Tuesday, after rising more than 6 per cent in the last 24 hours.

Bitcoin surged 7 per cent to regain the $20,000 mark, whereas Ethereum jumped on similar lines, flirting with $1,400 levels. These two tokens contribute over 55 per cent to the total crypto m-cap.

Meanwhile, altcoins, including Terra’ Luna Classic zoomed about 50 per cent, whereas Uniswap rallied 18 per cent. Stepn, Polkadot, and Aave also gained up to 14 per cent.

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View Details »Despite Dow Jones slipping into a bear grip amid fears of recession, the crypto market has shown strength.

Kumar Gaurav, Founder & CEO, Cashaa, said cryptos are in the bear market too, as many top tokens are trading steeply below their yearly high. “Not only cryptos, all asset classes are facing the heat of the bear market,” he warned.

However, Edul Patel, CEO and co-founder of Mudrex, believes that the global crypto market experienced a rise due to a massive influx of capital. “A pause in the dollar rally might also be a reason for crypto’s strength today,” he added.

A dead cat bounce on cards?
A dead cat bounce is seen as a continuation pattern in technical analysis as a rally that may at first seem to reverse the current trend, but it is swiftly followed by a continuation of the price decline. Experts, however, believe that things might improve if tokens can hold above key levels.

Abhijit Shukla, Founder & CEO, Revolution Games said that this rally is not backed by fundamentals and is being undone by a downward price trend. “Dead cat bounce normally only lasts a few days,” he added.

Bitcoin has come back from the dead more than six times in 13 years. Until there is the last node running, it’s not dead. To understand how Bitcoin functions go through the Satoshi Nakamoto white paper, said Cashaa’s Kumar Gaurav.

Is the worst over?
Experts believe that if there is an economic recession, the markets are likely to remain lacklustre, and winters might get prolonged. However, cryptos might recover and bounce back swiftly.

Shukla said that due to the increased participation more people would be impacted by the crypto winter, whereas Gaurav said liquidity remains on the lower side during the economic turbulence.

On the other hand, market participants believe that the market has been slow for some time, and investors might have buying opportunities for the longer run.

With uncertainty around macroeconomic factors such as increasing inflation and fear of recession, cryptos and stocks have been going through winters as investors are moving away from riskier assets, said Patel from Mudrex.

Source

Updated: 09/27/2022 — 14:00