The cryptocurrency market received moderate support from retail buyers over the weekend. Over the past day, the capitalization of all coins has increased by 0.22%, according to CoinMarketCap, approaching $1.97 trillion.
Bitcoin is Locally Oversold Bitcoin is locally Oversold
Top altcoins lose 11-19% in a week, but they found their buyers on the weekend. The $2 trillion mark of the total valuation of the crypt turned into a local resistance last week, from where sales intensified. Nevertheless, strong purchases on downturns still prevent the market from forming a downward spiral.
The cryptocurrency fear and greed index was stuck at the 23 mark over the weekend, indicating extreme fear. Since November 18, this index has been running in the lower half of the scale. Optimists, however, may note that the indicator has bounced back from the 10 level. The dip here in May-July coincided with the lows inside the momentum, hinting at the potential for a technical rebound.
The cryptocurrency Fear and Greed index is stuck in fear The cryptocurrency fear and greed index is stuck in fear
Technical analysis also allows us to hope for a rebound in BTC/USD, where the RSI on the daily charts shows attempts to get out of the oversold zone below 30, and the price is cruising near the reversal area in September.
A longer-term view of the cryptocurrency market makes us look at its prospects with more caution. Bitcoin has been in a downward corridor since November last year, having fallen to its lower limit by the end of last week. Local oversold is a chance for a rebound, but the overall trend is still down.
Investors in cryptocurrencies should not yet discard the idea of 4-year cycles in bitcoin, which affect the entire sector. According to this hypothesis, 2022 may turn out to be a repeat of the 2018 and 2014 bear market years after a surge in the previous two years.
Thus, it is worth paying increased attention to whether the crypto market will be able to return to growth in the coming days and weeks. A strong start to the year will help to dismiss these concerns.