The cryptocurrency market witnessed a massive cash flow of $198.91 billion to the market in a single day. Bitcoin has experienced a series of price drops in the previous few days, which led it to hit its lowest point in 2021. It then rebounded slightly on Wednesday. The digital asset is currently around $34,000, up more than 10% and looks set to move higher shortly. BTC dropped below $29,000 on Tuesday.
Coinmarketcap shows that the global crypto market cap has increased by almost 15% in one day. Despite a sharp drop to Bitcoin showing lows not seen in 2021, the digital asset has recovered well above $30,000 and is now trading higher than yesterday. This surge was also seen in the course of Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and other leading cryptocurrencies.
Cryptocurrency market splits analysts in two
Crypto experts are divided over whether the losses in the cryptocurrency markets are part of a larger bear market or simply a price correction amid a bull run that will push Bitcoin to new record highs later this year. Major investors tend to believe the latter, with MicroStrategy investing another $500 million in BTC earlier this week. Billy Markus, the creator of Dogecoin, also stated that he invested in cryptocurrency for the first time in eight years.
As reflected in the image below, the top five earning among the top 100 cryptocurrencies by market cap are Livepeer 37%, Celo 26%, Solana 22%, Chilliz 18% and Dogecoin 14%. This implies that traders see NFT, DeFi and prank coin as places to reap big profits in the future.
The market has experienced a significant downturn in recent weeks due to the falling price of Bitcoin, which has traditionally impacted the rest of the market. This setback started because of Elon Musk’s concerns about Bitcoin’s carbon footprint. Tesla CEO expressed his reservations about the huge energy consumption required for BTC mining. In addition to Musk’s suspension of Tesla purchases using the crypto asset, China has also recently banned Bitcoin mining at the country’s three major mining locations. Despite the recent influx of funds, some analysts think this may be a short-term increase and they expect more volatility down the road.
Analyst predicts a long recovery
Chris Vermeulen, founder of Technical Traders, said in an interview with HoweStreet.com radio:
“Bitcoin has been under pressure since May, everyone was expecting a V-shaped recovery, but the chart is still pretty bearish. He’s trying to find support here because in January this was the level where Bitcoin had been trading sideways for a month. There’s a lot of volume around that 30K mark. If not, we’ll go as low as 16,000, potentially back to 11,000, which could completely loosen the market’s mega rally from last year. This damage will take some time to resolve on the chart and it will eventually start another rally, potentially rising to 100k, but I don’t think it will happen anytime soon; It may take an extra year.”
Major fixes often follow any big move either way, so this is not unexpected. However, despite it breaking above the $30,000 resistance level, traders seem to be moving cautiously.