The cryptocurrency market saw its market cap get reduced by 4.5% over the past 24 hours, wiping nearly $100 billion off the market. The growing bearish sentiment has been prevalent since last month when the crypto market experienced its largest correction this year. Analysts suggest the market is slowing down and in a cool-off phase after five months of a continuous upward trend.
Top market indicators including exchange inflows, NFT trading volumes, futures premium have taken a hit over the past few weeks. The premiums on the Futures market have come down significantly including the popular Grayscale Bitcoin Trust, which has been trading on a negative premium for a couple of months now.
The daily exchange volume took a sharp dip over the past few weeks, indicating people are not trading as many cryptocurrencies as they were until the last few weeks.
The social media engagements which are believed to be a crucial indicator of newcomers have also taken a hit.
Bitcoin price fell by 50% from the top in the second week of May retracing to sub $30K levels from its ATH of $64,683. The price of the top cryptocurrency has been consolidating under $40K ever since. The negative premium on top BTC products is also an indication of declining institutional interest in absence of any price boost.
BTC is all set to register its first negative quarterly return since the first quarter of 2020. The fact that El Salvador’s Bitcoin adoption as a legal tender also couldn’t move the price above $40K is an indication of dominant bearish sentiment.
Would Bulls Return With Full Force?
At present, the bearish sentiment seems more prevalent than the bullish ones. Many believe these bearish phases are a part of the bull market while a few others warn about the further downside.
The Bitcoin dominance however is rising again and currently at 44.27% after bottoming at 38%. Bitcoin would need to surpass the key barrier of $40K to gain some upward momentum.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.