- Crypto market sentiment is bottoming out as legal battles and price drop spread fear.
- Market cap falls as negative sentiment overtakes prices.
When news broke about the legal battle surrounding Binance and Coinbase, the crypto market received a mix of reactions. Ripple (XRP), among other crypto-assets, showed evidence that it detached itself from the market trend by showing resilience while the overall market witnessed a downturn. Nevertheless, emerging reports indicated that prevailing sentiment across the market has turned mostly negative.
The crypto market is suffering from negative sentiment
New data from Sanitation revealed that current sentiment in the crypto market had reached its lowest point in quite some time. The combination of falling cryptocurrency prices and growing concerns surrounding Binance and Coinbase has officially pushed trading sentiment to its most negative level since the market crash caused by COVID in March 2020.
Source: Sentiment
Additionally, Cardano (ADA) garnered the highest negative sentiment when examining the weighted sentiment chart. Closely followed by Ethereum, Bitcoin (BTC) and Binance Coin (BNB), with their respective levels of negative sentiment.
Interestingly, Ripple (XRP) had the least negative sentiment right now. Previously, Ripple has shown some degree of detachment from the general market trend, but sentiment seems to have caught up.
Market capitalization of the crypto market is falling
Watch Market capitalization of coins, it becomes clear that despite the fall in the value of several crypto assets, the total crypto market cap remained above $1 trillion. However, upon closer examination of the chart, it becomes clear that the overall market cap has fallen.
Source: CoinMarketCap
In addition, the seven-day market cap chart illustrated a significant fall in value on June 14. By the end of that day, the market cap had dropped from about $1.058 trillion to about $1.023 trillion. At the time of writing, it fell further to around $1.015 trillion.
This decline meant that the negative sentiment in the market was gradually reflected in prices. Moreover, if this negative sentiment continues, further price declines could be observed.
Buy the dip?
While the current price drop seems like an opportune time to “buy the dip”, it is essential to exercise caution. Things can quickly become risky if prices continue to fall uncontrollably, similar to catching a falling knife.