The global cryptocurrency market crossed $1 trillion in market capitalisation in the past 24 hours, bringing relief to investors and raising hopes about the start of a bull run.
Strong buying interest in Bitcoin (BTC), the world’s largest digital currency, took it well above $22,700, while Ethereum (ETH), the second most valuable crypto, crossed $1,600, lifting the entire crypto market by about 5 percent in the past 24 hours.
After a crash in prices over the past several weeks, the market capitalisation of the crypto market stood at $1.01 trillion for the first time since June 13. BTC’s market capitalisation was $420 billion, while ETH had a market cap of $120 billion, with $20 billion added in the past 24 hours alone.
ETH is up by 54 percent over the past month, according to data from CoinGecko, an independent cryptocurrency data aggregator. The gains are on account of the much-awaited “merge” upgrade, which will take ETH from its current state as a proof-of-work (PoW) blockchain to an energy-efficient proof-of-stake (PoS) network in September, also dubbed as “Ethereum 2.0.” The asset had dipped below $1,000 less than a week ago.
No bull run, yet
According to experts, while there are signs of a revival in the crypto market, it would be premature to call it a bull run.
“There are no supporting headwinds to support the rally, with most factors that led to the crypto winter still in place. Investors can add small amounts of money at this point and wait for overall sentiment to turn positive before joining in the bull-run when it begins later on,” Arijit Mukherjee, founder of Yunometa, an NFT marketplace, told Benzinga.
“What we have seen this week is the break upwards. But this does not mean that the upward trend will continue,” said Jenny Zheng, NFT business development lead at Bybit. “We have to bear in mind that we are still in the bear market. The wild price fluctuations are part and parcel of the crypto. I will not go all in just because I see a small jump this week.”
According to Anndy Lian, chief digital advisor to the Mongolian Productivity Organization, there is no way to stop a bear market, which is a part of a financial cycle. “In the last week, we saw a bullish knife-catching trade setup and everyone was excited saying that bulls are back. This is totally not realistic and a misconception of naive investors,” Lian said.
The best-selling author added that bear markets are synonymous with momentary price upswings and that four of the last six months have been negative for crypto markets, signalling that the bear trend continues.
“Based on historical price patterns, the market is still in a bear channel, which started back in May. The two-week upswing is just temporary. This is no way near a bull run,” said Philip Verrien, project lead at Pollen DeFi.
