The total capitalization of the cryptocurrency market has fallen below $1 trillion. The last time the sector was capitalized was in January 2021. This is well remembered by crypto enthusiasts back then, but we’ll refresh your memory by looking at TradingView’s charts. So what will happen this time?
Is there any dedication yet?
No matter how much crypto fans wish to distance themselves from all the common and customary patterns of traditional finance, it is worth recognizing that the crypto market lends itself to the standard process of market cycles.
Briefly describing the market cycle, there are four major phases: accumulation, momentum, distribution, and surrender. The key question on the minds of those watching the market very closely is whether the capitulation has begun, or do we have room for a fall before it accumulates?
The subject is complex. For example, crypto analytics provider Glassnode wrote in its review in early June that the market is likely in the final stages of capitulation. Arguments and comments included the fact that the market is trading near 2021-22 cycle price lows, most investors are taking unrealistic losses and miners have lost earnings. The facts do indeed exist, but since the publication of the review, the overall capitalization of the crypto market has fallen by 22%, which is quite a bit.
At $943 billion, we are now $140 billion away from our 2021 lows, which equates to an additional 17% drop. Even if we do not reach these values, what happens next, as asked in the beginning, is clearly answered. Also, there will be a long, deposit-crushing, exhausting consolidation in any case, but that will be followed by a new dawn and new momentum in the market.