Crypto Traders Bullish Despite 5.5% Drop in Total Market Cap
• The crypto market capitalization remains above the psychological $1 trillion mark despite a 5.5% weekly decline.
• Recent negative remarks from regulators have created FUD in the industry.
• Technical analysis shows that there is room for an additional 3.5% correction in total market capitalization while still sustaining the bullish formation.
Crypto Market Capitalization Remains Above $1 Trillion
The recent weakness in the crypto market has not invalidated the six-week-long ascending trend, even after a failed test of the channel’s upper band on Feb. 21. The total crypto market capitalization remains above the psychological $1 trillion mark and, more importantly, cautiously optimistic after a new round of negative remarks from regulators.
Regulators Create FUD
Recent examples of bad news include a United States district court judge ruling that emojis such as the rocket ship, stock chart and money bags infer “a financial return on investment,” according to a recent court filing. On Feb. 22, Judge Victor Marrero ruled against Dapper Labs, refusing to dismiss a complaint alleging that its NBA Top Shot Moments violated security laws by using such emojis to denote profit. Outside of the U.S., the International Monetary Fund on Feb. 23 issued guidance on how countries should treat crypto assets, strongly advising against giving Bitcoin a legal tender status. The paper stated, “while the supposed potential benefits from crypto assets have yet to materialize, significant risks have emerged.” IMF directors added that “the widespread adoption of crypto assets could undermine the effectiveness of monetary policy, circumvent capital flow management measures, and exacerbate fiscal risks.” In short, those policy guidelines created additional FUD that caused investors to rethink their exposure to the cryptocurrency sector.
Technical Analysis Shows Bullish Formation
As displayed above, the ascending channel initiated in mid-January has room for an additional 3.5% correction down to $1.025 trillion market capitalization while still sustaining the bullish formation..That is excellent news considering the FUD — fear, uncertainty and doubt — brought down by regulators regarding the cryptocurrency industry..The 5.5% weekly decline in total market capitalization since Feb 20 was driven by 6 .3% loss from Bitcoin BTC $23683 Bitcoin +0 86 % MARKET CAP$45720bVOL 24H$112b BTC 4751k and Ether’s ETH 1654 Ethereum +075 % MARKET CAP19937bVOL 24H60793m ETH
Derivatives Data Highlights Positive Sentiment
Derivatives data highlights crypto traders’ positive sentiment and belief in further upside despite a 5 .5% weekly decline in total crypto market capitalization sucking out some altcoins winds little altering traders’ bullish point-of-view .
Conclusion
In conclusion , despite bad news from regulators creating FUD , technical analysis shows that there is room for an additional 3 .5 % correction down to $ 1 . 025 trillion market capitalization while still sustaining its bullish formation which suggests that investors are still cautiously optimistic about cryptocurrencies’ future performance .
