Bitcoin’s decline is oversold, but it’s too early to talk about a new rally

Bitcoin traded at $20,800, 5% higher than it was 24 hours ago. Ethereum saw a 6.4% increase in trading volume to $1130 during the same period. The top 10 altcoins are increasing from 3.5% (XRP), to a remarkable 15% (Solana).

According to CoinMarketCap the total cryptocurrency market capitalization rose 5% to $914bn Tuesday’s cryptocurrency fear and greed index remained unchanged at 9 points (‘extreme Fear’).

In spite of weak trading activity and the US holidays, Bitcoin held above the $20,000 level on Monday. This was despite the fact that it had fallen below the meaningful round level. This recovery has helped to reduce some of the oversold nature cryptocurrency. It is still too early to discuss a long-term reverse: All negative fundamentals remain.

We believe that until tight monetary policy tightening becomes the norm in the US, financial market pressures will quickly negate any bounces in cryptocurrency. Even if the bottom has been reached, it may take months for the next sustained rally to occur.

Peter Schiff, a well-known cryptocurrency critic and supporter of gold, cautioned that Bitcoin’s rise above $20,000 does NOT mean that it has reached ‘the bottom.

Dan Held, Kraken’s marketing director, stated that bitcoin chose the worst scenario in an era of rising inflation and a coming recession. He stated that ‘those who survive’ will be granted ‘HODLer’ status.

Nayib Bukele, President of El Salvador, urged cryptocurrency enthusiasts not to panic when the market plummets. He said that the market’s decline is normal and that participants should be patient.

JPMorgan Bank stated that the increasing share of stable coins within the total market capitalisation in crypto market is a sign of its potential growth.

Changpeng Zhao is the chief executive of cryptocurrency exchange Binary. He denied media reports that the exchange bought more than 100,000 BTC in a declining market.

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