Bitcoin and Ethereum Steady, Cardano and Polkadot Jump, as Crypto Market Nurses Wounds from Yesterday’s Dumpster

The crypto market is running a ranking this morning after a brutal Monday that saw double-digit losses across the board and saw the total market capitalization for the sector drop below $1 trillion for the first time since 2020.

At the time of writing, bitcoin sits at $22,019, down 1.51% in the last 24 hours. Ether is down 0.54%, currently priced at $1,209.00.

Major altcoins are rallying today, led by cardano, polkadot, and solana, up 6.75%, 4.43%, and 3.06% respectively.

TRX, the native token of the Tron multipurpose blockchain, is down 7.57% in the last 24 hours and is down 27% in the last five days. Its decline comes amid an aggressive defense of the token led by Tron founder Justin Sun and TRON DAO, a collective that manages a multi-billion dollar treasury used to prop up a carbon copy stablecoin, USDD, of failed TerraUSD. . which collapsed in May.

Looking further, these tokens are still down 20-30% in the last five days and 50-85% year-to-date. Ironically, the one exception is Tron, which rose briefly in early May amid the USDD launch hype, but has since relinquished those gains.

The focus now turns to identifying when, or if, we have reached the bottom of the market. Current technical charts suggest that the market is showing signs of overselling. The Bitcoin Relative Strength Index, Stochastic Indicators, and Bollinger Bands all suggest that a short-term correction is on the cards.

It also appears that after some multi-million dollar liquidations, activity in the derivatives market is calming down. Raghu Yarlagadda, CEO of main broker FalconX, said Forbes that “Leverage in the derivatives markets is definitely not as high as it used to be. This is a good sign because it means that people are not taking on leveraged bets.” Yarlagadda noted that many institutions on his platform prefer to use market-neutral strategies at the moment because they are unsure about the future direction of the market.

However, despite this lull and perhaps a brief turn to the upside, we are unlikely to break the long-term downtrend seen across all cryptocurrencies and other risk assets. Additionally, bitcoin broke above previous support levels this year in response to major market events such as the LUNA/UST crash in early May or the crash in January when the Federal Reserve announced it was going to start easing its dovish policy. .

The next data point to watch will be the Fed’s next monetary policy meeting reading today and tomorrow where it is expected to signal its next 50-75bp rate hike.

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