The total crypto market capitalization broke above $1 trillion on July 18 after an agonizing thirty-five-day stint below the key psychological level. Over the next seven days, Bitcoin (BTC) traded flat near $22,400 and Ether (ETH) faced a 0.5% correction to $1,560.
Total crypto market cap, USD billion. Source: TradingView
The total crypto capitalization closed July 24 at $1.03 trillion, a modest 0.5% negative seven-day movement. The apparent stability is biased toward the flat performance of BTC and Ether and the $150 billion value of stablecoins. The broader data hides the fact that seven out of the top-80 coins dropped 9% or more in the period.
Even though the chart shows support at the $1 trillion level, it will take some time until investors regain confidence to invest in cryptocurrencies and actions from the United States Federal Reserve could have the largest impact on price action.
Furthermore, the sit and wait mentality could be a reflection of important macroeconomic events scheduled for the week ahead. Broadly speaking, worse than expected data tends to increase investors’ expectations of expansionary measures, which are beneficial for riskier assets like cryptocurrency.
The Federal Reserve policy meeting is scheduled for July 26 and 27, and investors expect the United States central bank to raise interest rates by 75 basis points. Moreover, the second quarter of U.S. gross domestic product (GDP) – the broadest measure of economic activity — will be released on July 27.
$1 trillion not enough to instill confidence
Investors sentiment improved from July 18, as reflected in the Fear and Greed Index, a data-driven sentiment gauge. The indicator currently holds 30 out of 100, which is an increase from 20 on July 18 when it hovered in the “extreme fear” zone.
Crypto Fear and Greed Index. Source: alternative.me
One must note that even though the $1 trillion total crypto market capitalization was recaptured, traders’ spirits have not improved much. Listed below are the winners and losers from July 17 to 24.
Weekly winners and losers among the top 80 coins. Source: Nomics
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