Crypto analysts are analysing every while and predicting that the market cap is at risk of falling below $825 billion. However, there is no change in the trading behaviour of traders as they are still adding to their long and short trades.
After failing to surpass the $880 billion hurdle on December 14, the total market capitalisation of cryptocurrencies fell by 8.1% during the next two days.
The rejection did not invalidate the 4-week-long ascending channel, but a weekly closing below $825 billion will signal a change to the bottom band and decrease the support level to $790 billion.
Year-to-date losses total 66%, and overall investor opinion toward the market is still negative. Despite this, the price of Bitcoin BTC only fell 2% on the week, reaching $16,800 on December 16 at 17:00 UTC.
For cryptocurrencies, which are under pressure from impending regulation and worries that important exchanges and miners may go bankrupt, a very different picture has evolved. This explains why since December 9, the market capitalisation as a whole fell by 4.7%.
The committee in charge of a portion of FTX’s bankruptcy proceedings was revealed in court filings submitted on December 15 by a United States Trustee.
Among them are GGC International, a failing lending platform Genesis subsidiary, and Wintermute Asia, a prominent market maker. Investors speculate that the contagion might continue to spread because they are still unaware of who the largest FTX exchange group creditors are.
The Dutch central bank warned investors using KuCoin on December 15, stating that the exchange was functioning illegally. The cryptocurrency company was “illegally selling services” and “illegally offering custodial wallets,” according to De Nederlandsche Bank.
Mazars Group, a company known for its proof-of-reserve audit services for cryptocurrency businesses, purportedly took down recent papers describing exchange audits from its website on December 16, adding to the controversy.
The company was previously chosen to act as the official auditor for Binance’s proof-of-reserve updates, a move that Kucoin and Crypto.com also adopted.
The sharp decline in cryptocurrency prices and rising energy expenses have also hurt the Bitcoin mining industry. A $72 million contingent emergency credit line was provided to publicly traded miner Core Scientific to prevent bankruptcy.
While Bitcoin is still valued at less than $18,500, the financial lender demands that all payments to Core Scientific’s equipment lenders be suspended. Following Telegram’s opening of bidding for anonymous phone lines offered for TON tokens, The Open Network (TON) saw a 30% increase.
After Craig Wright, the project’s founder and self-declared Satoshi Nakamoto, filed an appeal against his loss in Norway courts, Bitcoin SV (BSV) gained 11.7%. Following $1.9 billion in withdrawals in 24 hours at its parent firm Binance, Trust Wallet (TWT) had a 27.2% correction.
In the end, bulls should refrain from counting on the $825 billion market capitalisation to hold, though it doesn’t necessarily indicate that a retest of the $790 billion support will happen immediately. Although the ascending channel’s bottom band still applies upward pressure, the news flow now favours bears.