Crypto Market Holds Firm Over $2 Trillion as BTC Reclaims $47,000 USD

Despite the digital asset market first reaching a US$2 trillion market capitalisation in April 2021, significant economic and geopolitical uncertainty has stifled the sector’s forward momentum in 2022.

However, a confluence of factors have turned things around, resulting in the market lifting above US$2 trillion for the first time in over six weeks:

Global crypto market capitalisation. Source: Coinmarketcap.com

After investors’ frustration at what felt like endless sideways price action, the sentiment across crypto Twitter was distinctly upbeat by the positive moves:

Green Candles for All

Digital assets across the board saw material gains, with the crypto economy’s total value holding above US$2 trillion for five consecutive days.

Advertisement

According to Coinglass data, around US$142 million in short liquidations contributed to bitcoin breaching US$47,000 for the first time since January. No doubt, Terra’s decision to buy US$10 billion in BTC is also at least partially responsible for the surge.

At the time of publication, bitcoin is trading at US$47,664, effectively erasing its losses and pushing past break-even for the year.

BTC price action over past seven days. Source: CoinMarketCap.com

Outside of BTC, altcoins similarly enjoyed a strong comeback, with a veritable feast of green candles on display. Analysts have suggested that the positive returns over the past week may be indicative of an impending bull market:

  • BTC – 12.7 percent
  • ETH – 14.5 percent
  • ADA – 30.4 percent
  • SOL – 22.7 percent
  • BNB – 7.8 percent
  • XRP – 4.8 percent
  • LUNA – 11.8 percent
  • AVAX – 6.7 percent
  • POL -15.2 percent
  • DOGE – 19.6 percent

Market Gets Greedy

It’s been said that fear and greed drive financial markets, and nowhere is that more apparent than in crypto.

Last week, the multifactorial Cryptocurrency Fear and Greed index was at 26 out of a possible 100 (a state of “fear”, one level up from “extreme fear”). Within a week, things have turned around and optimism is in the air.

The index is now tracking at 60, suggesting that investors are getting greedy, but nowhere near the extreme levels above 90 last seen in April 2021.

Despite his equating Bitcoin to rat poison, Warren Buffett’s cautionary words are perhaps worth noting, especially when the market is seemingly on the up:

Be fearful when others are greedy, and greedy when others are fearful.

Warren Buffett, investor and philanthropist

Dale Warburton
Author

Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

You may also like