Crypto Daily: Cryptomarket broke below $1 trillion and could re-test $920 billion

Aug 23, 2022
06:08
2 min reading

Choise.com team

The near term of the crypto market seems likely to trend to the downside, at least until the end of the week, according to a group of experts.

At the time of writing, the crypto market broke below the $1 trillion mark and could re-test support at $920 billion. Macro conditions seem to be pushing down risk assets, such as cryptocurrencies and equities.


Source: Tradingview

In a market update Matt Weller, Global Head of Research for FOREX.com, and City Index, stated that the current price action across the sector has been triggered by a decrease in risk appetite from market participants.

There is still much uncertainty around macro-economic factors which could be contributing to the latter. The U.S. Dollar (DXY Index) has been pushing upwards, as the market seeks shelter from high inflation and uncertainty, negatively impacting other major currencies, equities, and crypto assets.

If the U.S. dollar continues its ascend, the total market cap for the nascent sector could see a 58% decline by completing a bear flag formed on its weekly chart. As analyst Caleb Franzen said, this could push the sector to its 2020 levels at around $400 billion and take down a large portion of the profits generated during the past bull run.

“If you watched the livestream this morning, you saw me share this potential bear flag for $TOTAL crypto market cap. It would imply a -58% decline to $414Bn. Lines up with key structure. Difficult to see, but worth monitoring as a potential scenario…”
— Caleb Franzen (@CalebFranzen)August 22, 2022

For Bitcoin, this could mean a return to the low $10,000s. According to Weller, Bitcoin saw “durable damage” as its price was pushed from a yearly high of around $48,000 into a yearly low of $18,700.

For the second cryptocurrency by market Ethereum, an important benchmark for the sector, Weller believes it has seen an “impressive rally”. The cryptocurrency will complete its migration to a Proof-of-Stake (PoS) consensus with “The Merge”, this has supported the bullish momentum.

Bitcoin price analysis

Bitcoin pricegained bearish momentumbelow the $22,000 support zone. BTC declined below the $21,200 and $21,000 support levels before the bulls appeared.

A low was formed near $20,797 and the price started a short-term upside correction. There was a minor upward move above the $21,000 level. Besides, there was a break above a major bearish trend line with resistance near $21,270 on the hourly chart of the BTC/USD pair.

However, bitcoin price faced a strong resistance near the $21,500 level and the100 hourly simple moving average. It is now struggling to clear the $21,500 resistance zone.

On the upside, an immediate resistance is near the 100 SMA at $21,450. The first major resistance on the upside sits near the $21,650 level. It is near the 23.6% Fib retracement level of the key decline from the $24,415 swing high to $20,797 low.

Source: BTCUSD on TradingView.com

Ethereum price analysis

Ethereum price has witnessed a tough time lately, the altcoin logged heavy losses over the past one week. Broader market weakness could be blamed for the coin’s current price momentum.

Over the last 24 hours, Ethereum price fell by 4%. It has been a consistent downtrend after the coin lost the $2,000 price mark. The technical outlook for Ethereum price was also bearish as sellers had taken over at the time of writing.

If selling momentum takes over, it can be so that Ethereum might lose its support level and might fall considerably. The coin also formed a descending line which has intersected with the tough resistance mark of ETH.

If Ethereum manages to stay above its immediate support level then the coin might not after all trade near the $1,300 support mark. The global cryptocurrency market cap today is $1.05 Trillion, with a2.1%negative change in the last 24 hours.

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