The entire cryptocurrency market capitalization has fallen below the $1 trillion mark as market sell-off intensifies, with Bitcoin falling below the $25,000 support zone, a price point not traded since December 2020.
Bitcoin’s fall under $25,000 during the Asian trading session is amid weakness in the macroeconomic environment and systemic risk from within the crypto market. The asset has slid for nearly twelve straight weeks, falling from nearly $49,000 in March 2022 to under $25,000.
The market showed some signs of bottoming out in mid-May, after the Terra blockchain debacle, but worrying U.S. inflation data released last week did little to cushion falling sentiment. The consumer price index (CPI), the most widely tracked benchmark for inflation, rose 8.6% on a year-over-year basis in May, topping expectations that it would decline to 8.2% from April’s 8.3%.
Contributing to the fall is the decline seen in the Asian market today, Hong Kong’s Hang Seng fell nearly 3.5%, Japan’s Nikkei 225 fell 3.01%, while India’s Sensex dropped 2.44%. Futures of U.S. technology-heavy index Nasdaq opened 2% lower, while S&P500 fell 1.65%.
According to price-charts, bitcoin had strong support at the $29,000 mark, but the fall below that level now means that the cryptocurrency could drop to its 2017 high of nearly $20,000.
Readings on the Relative Strength Index (RSI) – a tool used by traders to calculate the magnitude of an asset’s price move – dropped under 30, suggesting a reversal could be on the way as short-term buyers react to technical data.
We are also seeing significant declines in the altcoin markets. As the saying goes, when Bitcoin sneezes, the altcoins market catches a cold. Ether, for example, is down over 17% today, currently trading $1,210 as of the time of this writing.
We are also seeing a lack of demand for the Ether as Ethereum alternatives, a term dubbed ‘Ethereum killers’, have gotten more institutional attention. Tokens like SOL, ADA and AVAX are seeing more institutional investments while Ether has seen more institutional divestment, data from CoinShares shows.
The altcoins market capitalization now stands at $510.6 billion, down over 27% in just 13 days in June.
The OKX Tether (USDT) premium is a good gauge of China-based retail crypto trader demand. It measures the difference between China-based peer-to-peer (P2P) trades and the United States dollar.
Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, Tether’s market offer is flooded and causes a 4% or higher discount. Recently, the Tether price in Asian peer-to-peer markets entered a 4% discount, signalling intense retail selling pressure.
The crypto market capitalization currently stands at $978 billion, down over 11% as the market selloff intensifies. YtD, the market has lost over 57%.