The total global market cap of all cryptocurrencies has dropped below $1 trillion for the first time since January 31, 2021.
The value dipped below the milestone in the early hours of June 13 by around $6 billion, taking the total value of all cryptocurrencies to just $994 billion.
Some basic technical analysis levels
Crypto markets have continuously declined following the announcement that U.S. inflation hit a record 8.6%. Bitcoin broke the $27,000 support level and is currently trading at around $24,300 at the time of writing.
There was no significant support level for those interested in technical analysis until the 2018 all-time high of $19,930. However, this has never been truly tested as a support. Some may look to the lower value of $9,200 as the next major support level to be tested and held on previous occasions.
A flight to safety
However, while technical analysis is used regularly among day traders, it is often hard to establish trends when considering the macro-economic environment. The charts do not know or understand inflation, war, community sentiment, or what is currently in the news cycle. As investors seek to find safe haven during an ever-increasingly bleak global economic outlook, the crypto markets are looking perceptibly riskier.
The collapse of the Terra ecosystem, ongoing concerns over Tether’s backing, Celsius halting withdrawals, countless NFT hacks, numerous DeFi exploits, and knowledge of the historic cyclic nature of crypto will all play into investors’ mindsets when assessing risk tolerance. The outlook for crypto in the short term may not look healthy when considering the amount of negative press from the onslaught of recent bearish events.
However, people building within crypto are as bullish as ever. Haseeb Qureshi, a Managing Partner at Dragonfly Capital, said,
“It’s hard to be bearish after witnessing the energy at Consensus. Macro’s gonna macro, but there are so many brilliant people hard at work in web3, a ton of problems will be solved over the next couple of years.”
RanNeuNer of Crypto Banter also commented:
“Walking through Consensus this year and comparing it to all the previous ones, you quickly realize how mainstream crypto is becoming! It’s happening way faster than we think!”
A new world
We will enter unknown territory if Bitcoin drops below the previous all-time high from the last halving cycle. While the crypto market has fallen dramatically in the past before recovering exponentially, Bitcoin has never fallen below an earlier cycle’s all-time high before.
Further, drops below crucial levels such as $21k could see problems for whales such as MicroStrategy, who would have to add to their positions to avoid a margin call.
Crypto Winter is historically tough to weather, and the current bear market may be no different. The future looks bright for crypto as companies such as Andreessen Horowitz recently announced a $4.5 billion fund to take advantage of the discounts as prices fall.
There is still a lot of money flowing into crypto projects, even if current prices do not reflect the optimism of those building behind the scenes.
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