14 May 2022 09:16, UTC
Reading time: ~2 m
Analysts called the “rebound of the dead cat” yesterday’s growth in the capitalization of the cryptocurrency market. This financial term emphasizes the insignificance of such an event as the recovery of the value of the asset, after a long fall.
The capitalization of cryptocurrencies in yesterday’s session increased by 3.6%, losing 57% of the maximum historical values, 30% of the drawdown fell on the current week.
Yesterday’s growth coincided with a recovery in demand for shares, despite the double-digit rise of alctcoins, the NASDAQ technology index overtook the capitalization of digital currencies in terms of growth. Investors give higher priority to the stock market, after the case of Terra (LUNA).
The utility token of the blockchain, which is in the top 10 cryptocurrencies, depreciated to zero within a week. Investors could lose more than $ 30 billion, which is equivalent to 2.5% of all investments in the cryptocurrency market.
For the time being, the collapse of the Terra blockchain will reduce the overall reaction of digital currencies to the fundamental positive, strengthening the response to the negative. Investors are waiting for decisions from regulators and legislators who conduct urgent consultations on stablecoins. This news can lead to new market lows.
On the other hand, a further drop is unlikely to be deep due to the high oversold digital currencies. The index of “fear and greed” reached an extreme value of 9 units, which was always followed by sharp rebounds with the formation of local trends.
The passed level of $ 30,000 for Bitcoin corresponds to the mass entry of institutional investors in 2021. It is likely that they will decide to “add” as soon as the price begins to decline. Bitcoin will not be able to ignore the general fundamental positive, which is gradually manifesting itself by the end of May.
The actions of central banks and low consumer demand have already reduced inflation rates, in Asia they have remained at a low level. According to the latest data, it can be seen that the Asia-Pacific markets export deflation to the Old and New Worlds. This will reduce the pace of tightening monetary policy, giving stocks and cryptocurrencies the opportunity to grow.
#Rebound #dead #cat #cryptocurrency #market