The crypto market has been on a roller coaster this year, with prices fluctuating wildly and regulatory pressures causing significant drops. However, recent events have given investors renewed confidence in the market, leading to a full recovery of the crypto market capitalization.
On June 15, the total crypto market capitalization hit a low point of $972 billion, following regulatory pressure from the Securities and Exchange Commission (SEC) on the industry. But since then, the market has recovered.
This recovery has been fueled in part by the entry of major financial players into the crypto space. Several applications for a Bitcoin Spot exchange-traded fund (ETF) have been filed by major financial players such as Blackrock and Fidelity, indicating that they are interested in betting on cryptocurrency.
This has helped rebuild investor confidence in the market, leading to further investment and an increase in total crypto market capitalization.
Crypto Market Cap Moment of Truth
Cryptocurrency investors are closely monitoring the total cryptocurrency market capitalization as it tries to overcome a significant resistance level. According For crypto analyst Rekt Capital, if the market can successfully break above this level, it could pave the way for continued upward momentum and potentially significant gains for the broader market.
At the time of writing, the total crypto market capitalization is around $1.17 trillion, with Bitcoin accounting for the majority of this value. However, the market has been trading in a relatively tight range for the past few weeks, with many investors looking for a catalyst to push prices higher.
Rekt Capital believes that a break above the current resistance level could be just the catalyst the market needs to see a sustained uptrend. Rekt Capital suggests that the market could see gains of 10-23% over time if this breakout occurs.
As shown on the chart, the immediate resistance levels for the global market cap of the cryptocurrency industry are currently at $1.18 and $1.25. The latter represents the highest level reached in 2023.
However, certain conditions must be met for the market to break above these levels. First, there needs to be an improvement in current market conditions, including a relaxation of crypto regulations by regulators globally, particularly in the US. Additionally, there needs to be a resolution of ETF applications from Ongoing Bitcoin Spot by major financial players with the SEC.
If these conditions are met, it could lead to an influx of financial players and investors into the cryptocurrency. Many investors look to cryptocurrencies for inflation protection, and greater regulatory clarity and the approval of a Bitcoin ETF could make the industry more attractive to traditional investors.
Cryptocurrency trading volume falls to 2020 levels
Cryptocurrency trading volumes have reached their lowest levels since 2020, despite the ongoing rally in June. According According to a report from crypto market data provider Kaiko, spot trading volumes have declined significantly in the second quarter, with Binance posting the steepest drop in trading activity.
Binance, one of the world's largest cryptocurrency exchanges, saw volumes drop by nearly 70% after the exchange reintroduced fees for its most liquid Bitcoin pairs. This move, intended to reduce market manipulation, appears to have significantly affected trading activity on the platform.
However, Binance was not the only exchange that saw a significant decline in trading volumes. Other popular exchanges, including Coinbase, Kraken, OKX, and Huobi, also saw volumes decline by more than 50% in Q2.
The decline in trading volumes is surprising given the recent rally in the crypto market. Bitcoin, the largest cryptocurrency by market cap, has been bullish in June, peaking at over $31,000. Despite this, trading volumes have remained subdued, suggesting that investors are not as active in the market as they have been.
Featured Image from Unsplash, Chart from TradingView.com
