Surge in Cryptocurrency Market Capitalization
On June 17, the cryptocurrency market saw a notable rise in its capitalization by more than 2%, pushing it to $1.05 trillion. This represents an almost 7.5% increase from the two-day prior low of $975.25 billion. Bitcoin, comprising nearly half of the crypto market, bounced back 8.5% from its June 15 low of $24,750.
Ethereum and Other Altcoins Rally
Ether, the second-largest cryptocurrency, has seen a 9% uptick over the past two days. Other significant performers include Solana, Cardano, and Polygon, all recording a recovery between 8-15% in the same period.
Understanding the Oversold Bounce
The crypto market capitalization began to recover a day after its daily Relative Strength Index (RSI) dipped nearly 30, indicating an "oversold" status. Traditionally, from a technical perspective, an oversold RSI often signals a price recovery or consolidation.
Buzz Around BlackRock's Bitcoin ETF
The crypto market's recent bounce can also be attributed to increasing speculation about the approval of the first Bitcoin ETF in the US Investment giant BlackRock, which manages $9.5 trillion in assets, applied for a Bitcoin ETF with the US Securities and Exchange Commission (SEC) on July 16.
The Impact of a Possible Bitcoin ETF
Since BlackRock's application, the crypto market has risen 4.5%. Analyst Lark Davis predicts that SEC approval could trigger BlackRock to purchase every available Bitcoin on cryptocurrency exchanges. Despite this, the SEC has previously rejected all Bitcoin ETF applications, including those from major asset managers like VanEck, Ark Invest, and Bitwise.
Crypto Market Projections for the Second Half of 2023
From a technical viewpoint, the crypto market has been moving within a 'bull flag' pattern since April 2023, suggesting a potential continuation of the recovery trend towards $1.37 trillion in the second half of 2023 - a 35% surge from the current valuation. However, suppose bears manage to push the market cap below the lower trendline of the bull flag. In that case, it risks invalidating the bullish setup, potentially leading to a drop toward $875.50 billion - a key support level in the June-November 2022 and March 2023 sessions.
