The recent volatility has led to a flurry of activity, with prices fluctuating and presenting both challenges and potential openings for those keen on capitalizing on the pullback.
The sell-off across the various cryptocurrencies will, of course, significantly impact the crypto market cap. Bitcoin’s dominance of the market cap currently stands at over 52%, while ETH takes up 16.3%. Both have experienced share moves lower over the last few days, with Bitcoin down over 10% in the last week and ETH falling over 15% in the last seven days.
The current crypto market cap stands at around $2.43 trillion. However, this week, as cryptos initially moved lower on Wednesday, the market cap dropped as much as 18% from its March highs. That was before the reversals during Wednesday’s session, with both BTC and ETH currently sitting in positive territory.
Despite the shaky week, Bernstein analysts said in a recent note that they believe the crypto market cap can reach $7.5 trillion in 2025.
The firm stated, “We continue to see a cross-cycle 18-month opportunity with Bitcoin and the entire crypto ecosystem.”
Jonny Huxtable, CEO of LinkPool, told Investing.com that they “see a confluence of factors that are currently impacting the price of Bitcoin.”
“The first is that BTC traditionally struggles to reclaim previous cycle all-time-highs and this cycle is no different,” he explained. “It took approximately 3 weeks at the end of 2020 for BTC to go into price discovery and truly clear $20k.”
Huxtable noted that an interesting aspect of this cycle is that Bitcoin has never broken above its .618 cyclical fib on its first attempt.
“We saw this happen in each past cycle where it was swiftly rejected at each .618 tag, but this time was different and came as a shock to many traders and analysts,” Huxtable stated. “This is a testament to the spot BTC ETFs and the asset managers that oversee them. If there’s one thing they’re good at doing, it’s diligent profit taking.”
Overall, LinkPool anticipates sideways and “downwards chop” going into the halving and for some time after, similar to the 2015-2017 uptrend.
Huxtable declared: “BTC is seeing more demand than ever, and with its daily output about to be cut in half, we anticipate an unprecedented market reaction to the great supply shock BTC will face to date.”
Elsewhere, Nejc Kržan, Head of NiceX Exchange, NiceHash, told Investing.com that we “are seeing a natural market shift at this point.”
He believes this is a culmination of several important factors.”On one side, many investors who recently came into the market who were hoping the BTC price would continue to break through the all-time high and rise further, have sold to take short-term gains,” he explained.
Kržan added: “On the other hand, we have the Fed and other central banks looking a lot more cautious about cutting rates to soon, which has really dampened the high optimism from the previous month, and so bigger investors are more cautious with less traditional assets”
He also notes that the BTC-to-Gold correlation is at an all-time high, signaling that “we can expect Bitcoin to follow the global markets more closely now that such massive volumes of institutional money are flowing in and out of the ETFs.”
Despite an initial decline to below $61,000 earlier in the session, Bitcoin is now up 3.8% on the day, trading at $64,256, as of 10:59 ET.
Ethereum has followed a similar pattern. It fell to around $3,059 earlier in the day but is now up more than 7% at $3,394.3.
Elsewhere, Solana, after declining over the past two sessions, is up around 3.5% Wednesday, trading at $175.75.
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