The crypto cap sinks below $2.00 trillion
|Market picture
Pressure on the crypto market returned on Tuesday and intensified on Wednesday morning, with capitalisation falling 4.8% to $1.98 trillion. This is below the psychological support line that attracted buyers for most of August and is the lowest level since August 8th. The nature of the decline early in the day suggests another wave of stop orders during a period of reduced liquidity, so it is too early to say that the $2 trillion support has been breached.
On Tuesday, bitcoin sellers took the initiative first on the approach to $60K and then at $59K, supported by the growing sell-off in traditional markets. Bitcoin fell to $55.5K at the peak of the decline before stabilising at $56.4K. Current levels acted as support during the May and July declines, but the trend of lower local lows sets up a reversal at $54K at the earliest.
Like other altcoins, Ethereum's local high was on August 24th, two days before Bitcoin reversed and interrupted a corrective rebound. Technically, a retest of the August 5th lows around $2100 is now more likely.
News background
Former BitMEX CEO Arthur Hayes attributes Bitcoin's fall to a lack of liquidity. He estimates that this situation will continue as long as the US Treasury's four-week T-bill rate is lower than the Reverse Repo Rate (RRP). Currently, the spread is minus 0.92%.
QCP Capital, citing seasonality, says it makes strategic sense to accumulate bitcoin in September and then take profits in October or near the end of the year. September has historically been negative for all asset classes, including BTC. October has been the opposite—in eight of the last nine years, the top cryptocurrency has gained an average of 22.9%.
The developers of BNB Smart Chain (BSC) reported on the growth of the ecosystem on the fourth anniversary of the launch of the core network. The number of daily active users of BSC reached 1.2 million and of opBNB 2.7 million.
The decentralised forecasting platform Polymarket has been integrated into the Bloomberg Terminal, according to its founder Shane Coplan.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.