The crypto market saw its total market capitalization rise by 10.4% since the rapid price drop in the early hours of Monday. Bitcoin [BTC] led the charge and won 10.55%. Some altcoins have posted bigger returns.
The US government reopened on November 13, after a 43-day hiatus. This threw a spanner in the works, because the market missed important information. Some reports were released.
For example, payroll processor ADP said this on Wednesday private employers have cut 32,000 jobs in November. Economists, on the other hand, expected an increase of 40,000 jobs.
On the plus side, the Federal Reserve has officially ended its policy quantitative sharpening (QT). The stock market also performed positively on Wednesday, with the S&P 500 up 0.3% on the day.
Bank of America and BlackRock argued that the AI boom was driven by real business investment, not the irrational exuberance that fueled the dot-com bubble.
The current environment was previously described as a “air pocketthen a bubble from Bank of America’s head of equities and research.
These developments showed that the already volatile crypto sphere was also being pulled in different directions by the indecisive macro conditions.
Crypto bounce is not supported by strong capital flows
Source: TOTAL on TradingView
The total cryptocurrency market cap fell below $3.56 trillion in September, a key support level. The trend continued to decline, but something interesting happened in the last two weeks.
The November 2023 trendline support (yellow) was broken in November. The retest at the same level as resistance surprisingly did not reject the overall market capitalization.
It served as support again in recent days. Perhaps the crypto bounce could continue in the coming weeks.
The Open Interest behind Bitcoin has grown slowly over the past three days, but was still shallow compared to the October highs.
A lack of speculative interest showed that market confidence was still low and bullish bets were not as high as before.
Continued growth in spot demand and OI is necessary to drive the next rally. Until then, investors and traders can view the rebound as an upswing and not expect a full recovery.
Final thoughts
- The crypto boom amid uncertain broader market sentiment meant investors had to remain cautiously optimistic.
- Continued mockery and speculative volume will indicate that capital flow is back into crypto. The Fed’s dovish policy could make this a reality in the coming months.