Global Cryptocurrency Market At Risk of Declining 58%!

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Risky investments like cryptocurrency and stocks appear to be falling as a result of macroeconomic conditions. Since 2017 and 2018, the price movement of Bitcoin and other cryptocurrencies on the market has been bearish for the longest period of time.

All eyes seem to be on developments in the global macro economy and how growth and inflation will affect the value of cryptocurrencies.

The overall market value for cryptocurrencies fell below $1 trillion at the time of writing and may retest support at $920 billion.

Bitcoin faces ‘Permanent Damage’

By completing a bear flag created on its weekly chart, the sector’s entire market cap might experience a 58% fall if the U.S. currency keeps rising. This could drive the industry to its 2020 levels, which are estimated to be about $400 billion, and wipe out a large chunk of the profits made during the previous bull run, according to analyst Caleb Franzen.

This might bring Bitcoin’s price back to the low $10,000 range. Weller claims that as Bitcoin’s price fell from a yearly high of about $48,000 to a yearly low of $18,700, it suffered “permanent damage.”

BTC created a rising channel as the price recovered from those lows, but last week it was rejected by the 50-day Exponential Moving Average (EMA). The price of Bitcoin dropped below this channel, as shown in the chart below, “leaving a negative near-term bias for a probable retest of the summer lows under $18,700.”

Weller thinks Ethereum, a crucial benchmark for the industry, has experienced an impressive rally. With The Merge, the cryptocurrency’s transition to a Proof-of-Stake (PoS) consensus will be complete. This has helped the positive momentum.

However, Ethereum price is currently trading below its EMA and this might drive its price back to its late July swing bottom near $1,375, according to the analyst. As can be seen from the chart below, ETH may retest that support with a chance of falling to $1,275 and $1,000 if bulls can push the price back to its levels from last week.