Bitcoin hits $21K, as the total crypto market cap nears $1T
October 26, 2022 11:55 PM
For a second day in a row, Bitcoin and other cryptocurrencies have been gaining ground as the United States dollar falls.
As buyers consolidated their gains following the opening of Wall Street on October 26, Bitcoin (BTC ) re-entered the $21,000 range for the first time since September.
1-hour candle chart for BTC/USD (Bitstamp). From TradingView.com.
BTC bulls "gorge" and demand more liquidity
For over six weeks as of this writing, the two had been exploring unreachable territory.
The rate of liquidations also remained high, with $750 million worth of Bitcoin positions being liquidated over the course of the past 24 hours, as measured by data from Coinglass.
The sum of $1.43 billion liquidated across all cryptocurrencies is now the highest for the year 2022.
Chart of cryptocurrency liquidations Source: Coinglass
U.S. stocks were flat that day as Bitcoin caught up, decreasing the correlation between Bitcoin and other risk assets.
As the U.S. dollar faltered, attention shifted to gold, which also experienced a relief rally. The value of the U.S. dollar index (DXY) has been trending downwards since September 20.
chart of the DXY dollar index for one day. Source: TradingView
Material Indicators, an analytics platform, noticed a rise in ask liquidity while monitoring the order book on the largest global exchange, Binance.
For example, it said in part of a Twitter update that "a big chunk of ask liquidity was eaten in the past 24 hours and some has been replenished," implying that BTC bulls received some assistance when blocks of bid and ask liquidity were adjusted upward.
Order book information for Bitcoin/US Dollar trades. Material Indicators / Twitter
Among these analysts was Il Capo of Crypto, who predicted a market retracement at $21,000 to retarget macro lows.
A similar sentiment was expressed by Rekt Capital, a trading and analysis firm, which warned that Bitcoin's decline from record highs was far from over.
He tweeted with contrasting charts, "On the normal scale, BTC is breaking its year-long downtrend."
"However, the downward trend of the past year is still quite untested on the log scale."
Bitcoin/USD log chart. Twitter/Rekt Capital, the original source
Key benchmark in crypto market cap is in sight
The crypto markets as a whole, not just Bitcoin, saw positive developments.
Even though cryptocurrencies as a whole have lost a lot of value this year, the total market cap came within 5% of $1 trillion on that day.
David Gokhstein, founder of Gokhstein Media, reacted, "Total Market Cap of crypto is up 2.5% today," highlighting the euphoria among market participants.
1-day candle chart of the cryptocurrency market capitalization. From TradingView.com