- The crypto market rebounds with bullish momentum and increased market cap.
- A sudden price surge caught traders off guard, signalling further potential gains.
- As legal concerns with Binance and Coinbase persist, caution is advised amidst ETF excitement.
The cryptocurrency market has witnessed a remarkable recovery, dispelling the bearish sentiment that plagued it earlier this year. In its latest report, Santiment, a blockchain intelligence firm, has identified several bullish signals, indicating that this upward trend may continue.
Blackrock’s Entry and ETF Craze Boost Crypto Market Sentiment
After starting the year positively, the crypto market faced a challenging period, with a 19% decline between April and June. Furthermore, the SEC’s lawsuits against major exchanges Binance and Coinbase raised concerns among investors. However, recent market developments, including the entry of Blackrock and the announcement of a full-blown ETF, have injected fresh optimism.
Prominent financial institution Blackrock has reportedly shown interest in shifting its focus towards cryptocurrencies. The market took notice when they announced a comprehensive ETF offering. This move influenced other fund managers to follow suit, resulting in at least ten similar announcements. The influx of institutional interest has positively impacted the global crypto market, which experienced a 3.98% increase in market capitalization within the last 24 hours, according to CoinMarketCap.
According to Santiment’s data, the crypto market’s bullish momentum will continue in the weeks ahead. The data highlights that the crypto market is catching up to the equities market, which has been displaying more robust performance recently.
Santiment Signals Caution Amid Potential Gains
Moreover, the average trading returns for mid-term traders indicate they are closer to opportunity zones than danger zones. However, Santiment points out that many traders still grapple with losses in various assets, emphasizing caution.
MVRV opportunity and danger zone divergence (Source: Santiment)
Interestingly, Santiment highlights that the recent surge in crypto prices caught many traders off guard, as these traders were in the process of taking profits. This unexpected surge suggests that there may still be room for further gains in the market.
Despite the excitement surrounding the ETF frenzy, Santiment urges traders to remain vigilant regarding the ongoing legal battles involving Binance and Coinbase. It is important to remember that these legal matters have not been resolved solely due to the ETF developments.
In conclusion, Santiment’s report provides valuable insights for traders navigating the crypto market. While the recent positive developments and bullish signals indicate a potential for continued growth, traders are advised to maintain a cautious approach. The intelligence firm cautions against excessive euphoria within the crypto crowd, as it could signal a temporary peak in the market.
As the crypto market recovers from the bearish sentiment of earlier this year, the entry of institutional players and the growing interest in ETFs have significantly bolstered market sentiment. However, traders must remain informed and mindful of the ongoing legal battles.