The crypto market is losing steam again after the weekend relief rally abated. One of the main reasons for this year's decline is the increase in market FUD ahead of the Fed meeting.
Bitcoin [BTC] has fallen below the $21,500 mark again as we approach a critical crossroads.
Emotional baptism
Bears took full control and drove assets lower over the weekend. But on July 25, Bitcoin fell sharply as it fell below $22,000. The next day saw a similar drop, with bitcoin falling to the $21,000 mark.
But it has responded positively to this fall, trading at $21,322 at the time of writing. According to analytics firm Glassnode,
"If realized prices and long-holder realized prices can serve as support levels, momentum in the near term suggests the rally will continue. In the long run, momentum suggests that the worst capitulation may be over, but a longer recovery time may be required as base repairs continue."
There's more here
The recent Glassnode update claims that shrimp herds have started to accumulate BTC in large numbers. Shrimp (< 1 BTC) has increased its holding from 5.2% to 6% of the BTC supply in circulation.
There has been a 0.8% jump since the LUNA crash, equivalent to about 156,000 bitcoins.
That said, Mike McGlone, senior commodities analyst at Bloomberg Intelligence, remains optimistic about Bitcoin.
McGlone said in his latest tweet that Bitcoin could see a reversal in the second half of 2022.
It's a particularly bold statement, given how much Bitcoin has lost value since the beginning of the year. McGlone asserts that Bitcoin is one of the "fastest horses" in the race since its inception.
Now, as we approach a key Fed decision, the crypto market continues to fall. On July 26, losses topped $50 billion.
That puts the market at risk, as its market capitalization falls below the $1 trillion mark.
As a puppet of the crypto market, Bitcoin itself is trying to stay vigilant. The $21,000 support level also looks solid, but remains bleak based on the recent past.