After enduring a tough first half of the year characterized by a significant sell-off, the cryptocurrency market is posting minor gains led by Bitcoin. The gains are highlighted by an increase in the inflow of capital into the market.
As of June 17, the total global cryptocurrency market capitalization was $906 billion, while on July 17, the figure was $977 billion, a growth of 7.83%, according to data from CoinMarketCap.
The gains came despite major cryptocurrency companies restructuring their operations, such as opting for bankruptcy protection due to the general market downturn.
Crypto lending platform Celsius is among the high-profile entities that filed for bankruptcy after suspending customer withdrawals. Crypto hedge fund Three Arrows Capital and lender Voyager Digital have also filed for bankruptcy.
Although the market is making short-term progress, the current state is a shadow of last year’s gains, in which Bitcoin hit an all-time high of almost $68,000, with a total crypto market capitalization of over $3 trillion.
Bitcoin maintains gains above $20,000
Over the past 30 days, Bitcoin has also struggled to sustain gains above the crucial $20,000, at some point dipping below the level. Over the period, the flagship cryptocurrency has seen minor gains of around 1.5%, trading at $21,400 at press time.
However, investors are keeping an eye out for a possible extended rally as Bitcoin helps stabilize above $20,000. In particular, the $30,000 level remains a key psychological point. Based on current market conditions, it can potentially hit the $30,000 mark in September.
Cryptocurrency market gains can be seen as bullish sentiment considering the current high inflation environment. US inflation in June hit a record high of 9.1%, and the crypto market reacted instantly, losing around $15 billion in minutes.
Indicators of a market bottom
The focus is on whether the market has bottomed out and is ready for another rally. Although analysts seem divided on the next course of the market, multi-asset brokerage eToro’s cryptocurrency consultant Glen Goodman believes recent negative headlines, especially in the mainstream media, indicate a bottom.
Following the massive correction, some media platforms and analysts have suggested that Bitcoin and the crypto market are dead, projecting a further correction.
The negative headlines have also been fueled by significant losses suffered by investors, with several crypto-related companies suspending key operations.
In addition, the sector has been affected by controversies such as the fall of the Terra (LUNA) ecosystem that resulted in significant losses. Consequently, the incident appeared to have weakened confidence in the market, especially with allegations citing network founder Do Kwon’s involvement in the losses.
In general, the market continues to await the impact of any crypto regulation, with most jurisdictions citing the need to protect consumers while proposing various regulatory frameworks.
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