The overall crypto market is still retreating from its weekend highs. Meanwhile, analysts are debating whether things are showing signs of recovery or capitulation.
Since their weekend high of over $1.1 trillion, the crypto markets have retreated by nearly $50 billion. Overall market capitalization is down about 3% that day, and at press time, prices are again heading south.
Resistance is proving to be excessive, and the bear market continues to consolidate. Market observers and analysts are finding evidence for both scenarios, a recovery and a surrender.
A Case for Crypto Market Recovery
The Cumberland crypto liquidity provider was claiming “a budding uptrend is taking shape in crypto,” claiming in a tweet on November 7. The company used the backdrop of a weak US dollar and a bright macroeconomic environment. Cumberland said the US midterm elections could be intensifying today.
He noted that the greenback’s rally has topped. This is good news as the dollar’s strength killed sentiment across every major risk-averse asset class, including commodities and crypto.
Furthermore, the macroeconomic uncertainty from Russia’s war in Ukraine has led to a state of “unstable equilibrium”.
“In the absence of new geopolitical developments, the reduction in volatility should result in higher asset prices.”
Furthermore, crypto has been a concern for the new tech-savvy “crypto voter” in the medium term. A victory for Republicans could herald a period of higher incentives and easier regulation, Cumberland said.
Lastly, there has been strong adoption of crypto despite the decline in token prices. “As we have seen from previous cycles, strong adoption narratives can lead to parabolic rallies,” it concluded.
not so fast…
Basically, the crypto market may be strong, but on-chain metrics paint a different picture. On November 8, Charles Edwards, the founder of the Capriole Fund, shared a chart with a bleak outlook.
This shows that Bitcoin’s untapped profit and loss indicator is in the surrender zone for long-term holders:
“We have entered the capitulation value zone (red) which is only seen once every 4 years.”
On-chain bottom indicators are all flashing, and charts strongly resemble Last bear market low. Furthermore, some industry executives, such as Tezos co-founder Kathleen Breitman, believe that the ongoing crypto winter is about to get worse.
Meanwhile, analysis provider Glassnode reported that BTC held and lost record highs last week after aggressive accumulation.
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