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Revival of optimism in the crypto market
The crypto market is starting the fall season quite positively. While this is far from a dizzying rally, indicators and price momentum are generally bullish. The total capitalization of the crypto market is gradually increasing to over $2 trillion, which is not far from historical highs. An even more positive sign is the decline in the dominance index, which has already fallen to 41.9%. This directly points to the existence of widespread demand for altcoins. The capitalization of the first cryptocurrency reached $934 billion, approaching the key psychological threshold of $1 trillion. The total capitalization of the…
Revival of optimism in the crypto market
The crypto market is starting the fall season quite positively. While this is far from a dizzying rally, indicators and price momentum are generally bullish. The total capitalization of the crypto market is gradually increasing to over $2 trillion, which is not far from historical highs.
An even more positive sign is the decline in the dominance index, which has already fallen to 41.9%. This directly points to the existence of widespread demand for altcoins. The capitalization of the first cryptocurrency reached $934 billion, approaching the key psychological threshold of $1 trillion.
(ETH), which has exceeded USD 3,700 and is not stopping its upward movement, is particularly noteworthy. There are several important reasons for this growth, including the decline in ETH coin inventories on cryptocurrency exchanges. According to analytics firm CryptoQuant, the volume of coins on cryptocurrency wallets has dropped by 700,000 ETH in less than half a month.
As in traditional economics, the decline in supply spurs price growth and sometimes even increases demand for a limited commodity. Additionally, the coin is strongly supported by the events surrounding NFT. The CryptoPunks project is reaching Hollywood levels, and that cannot help but drive demand for these tokens. It is worth noting that NFTs run on the Ethereum blockchain and every transaction within the ecosystem is subject to fees. The locking of coins within the DeFi protocols also affects the decline in coin supply.
The news that the European Commission is seeking to introduce cryptocurrency regulations in the EU, relating, among other things, circulation rules in the bloc's member states can be viewed with some concern. The initiative is facing quite strong opposition from citizens of different countries who prefer regulation at the level of individual countries.
Beijing wants to create an international network for mobile payments using the digital yuan. China's economic machine demands that the currency become international. The country now has the power to create a truly competitive digital currency, but protectionism and direct opposition from Western countries to the digital yuan could hinder these plans.
In the future, the global digital economy is likely to revolve around several major centers of gravity, one of which will be China, which absorbs all of Asia, while the second center will be in Washington, which dictates the rules for the West. There will be no predetermined winner, but we can guess who will be among the losers - the first cryptocurrencies that can await the fate of Yahoo and other once great but lost power projects.
The FxPro analyst team