The crypto market had suffered a long stretch of downtrend following the mid-June market crash. This had brought the total market cap down to yearly lows as large and small cryptocurrencies alike suffered. However, there is starting to be a turn in the tide with the new week. The crypto market cap, which had been trending below $900 for the better part of the week, had put on $100 billion.
Crypto Sentiment Begins To Turn
The crypto market cap still remains below $1 trillion but it has recovered to a good point. With the price of bitcoin above $22,000, it has gotten close to reclaiming this crucial position. Another thing that has pushed the crypto market cap has been the recovery of Ethereum, whose recent bullish tendencies have rubbed off on other smart contract platforms in the space.
Related Reading | Bitcoin Marks One Month Of Negative Funding Rates, More Decline Incoming?
With this, the sentiment of crypto investors has begun to shift. One of the ways in which this has happened has been in the reading of the crypto Fear & Greed Index. This index uses data from five different metrics to present a figure that represents how investors are feeling toward the market.
Crypto market cap recovers close to $1 trillion | Source: Crypto Total Market Cap on TradingView.com
For the better part of June, the index had been in the ‘Extreme Fear’ territory. This was as the bear trend raged on, and investors had taken a step back from the market due to the losses. This saw the market close out the month with one of the lowest scores in the interest of the index with a 6.
However, as some cryptocurrencies in the market have recovered, so has the market sentiment. The Fear & Greed Index presently sits at a score of 20 at the time of this writing. So although it still remains in the extreme fear territory, it is up 14 points from last month’s close.
Related Reading | Mid Cap Crypto Coins Lead In July, Best Way To Weather The Winter?
There is no doubt that bitcoin’s recovery above $22,000 has a lot to do with this. The pioneer cryptocurrency is a market mover, and if it continues to grow, it is expected that market sentiment will recover more.
One thing to note, though, is that such large recoveries in such a short time can lead to sell-offs. Mainly, investors often see such moves as a ‘bull trap’; hence they try to get out of the market before the inevitable retracement. Over the last 24 hours, there have been more BTC going into centralized exchanges with a positive net flow of 725.2 million. This supports the fact that investors are taking this time to sell their holdings.
Featured image from Kapersky, chart from TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…
