After the crash, the crypto market starts the new week with its head down. The biggest landslide seems to have been digested, but aftershocks have slowed down the race to catch up.
Even on the weekend of Pentecost, Bitcoin and Co. were not spared the turbulence. Total market cap has fallen $ 300 billion since Friday and is holding just over $ 1.5 trillion. The Bitcoin course was able to catch up again to 40,000 US dollars in the same period. Profit-taking pushed the price back down to $ 34,000 on Saturday. The key crypto currency is thus falling 21 percent in a weekly comparison, but is starting the next attempt to catch up and is up 2.2 percent in a daily comparison. At press time, the BTC price was trading at $ 36,538.
Altcoin battlefield
The aftershock of panic sales has so far shaken the first attempts to bottom out in the crypto market. Even with the second largest cryptocurrency. Since Ethereum narrowly missed the 3,000 mark on Thursday, the second largest cryptocurrency has been sliding further and further down. However, the Ether price has recovered somewhat from yesterday’s weekly low at 1,850 US dollars. Ethereum is currently trading at $ 2,291 – a weekly decrease of 36 percent.
For the rest of the ten largest cryptocurrencies, the situation in the weekly view hardly looks rosy. Cardano (ADA) is down 35 percent to $ 1.49. Binance Coin (BNB) slips back almost 47 points, Dogecoin (DOGE) and XRP each dropped 34 and 41 percentage points in the last seven days.
Polkadot (DOT) and the Internet Computer (ICP), which has recently been included in the ranking of the ten largest crypto assets, got down 53 and 30 percent respectively. The ongoing bloodbath is reflected in the overall market visualization of Coin360 that has been dipped in red for days.
At least in the week view. A little more hope comes up when looking at the day’s performance. Follow-up purchases are currently turning the crypto market back into positive territory. It is questionable whether this will initiate a trend reversal. Similar patterns appear again and again after such a crash. As soon as the return turns out to be large enough to cover the losses incurred in the flash crash, sales are likely to push the overall market down again. This highly volatile movement could keep the market recovering for a few more days.
Bitcoin dominance is catching up
Bitcoin’s share of total market capitalization has steadily decreased over the past few weeks. A week ago, on May 18, Bitcoin dominance was just under 40 percent, its lowest level in three years. The slipping of the BTC dominance signaled above all the rally on altcoins, which hurried impetuously from one to the next record high. The low value already indicated that a few small bubbles have formed in the market. A high bitcoin centering and thus dependence on the crypto key currency also creates a height of fall. The distribution of market shares in favor of some hype coins was the hallmark of an unhealthy rally that was bought at a high price in retrospect.
Gradually the distribution is getting back to a healthy average. At its peak, the dominance reached a value of 48 percent in yesterday’s trading and has thus increased by 10 percent in just one week. The Bitcoin share of the crypto market is currently back at just under 46 percent. In other words: the crash took some pressure out of the boiler and brought the focus back to No. 1.
China is pushing bitcoin hash rate
Last week, two reports from the Far East caused the biggest crypto crash since the outbreak of the corona pandemic. After the Chinese government imposed a crypto ban on financial service providers, mining is also heading for more stringent regulation. What exactly these stricter requirements will look like is still unclear. Vice Prime Minister Liu He got loud Reuters However, it has been announced that it intends to crack down on crypto mining in the future. China had announced stricter controls on mining operations and tracking energy demand a few weeks earlier.
The tougher course against miners has already visibly scratched the hash rate. On May 15th, the hash rate reached a new record high of 180 EH / s. Since then, network computing power has fallen by 20 percent to currently 145 EH / s.
China, which has always been the mining hub where around two thirds of the global hash rate is bundled, is becoming increasingly unattractive for miners due to stricter regulations. So far, the low electricity costs have been the main argument for mining operators. If this argument falls away and the government sticks to the sanctions course, the miners and with them the concentration of the hash rate could gradually shift to other countries.
In this respect, the clear announcement to the mining industry also offers an opportunity to decouple from the Middle Kingdom in the long term. With its zigzag course, China has repeatedly exerted an influence on the crypto ecosystem for years. The less dependent mining is on government favor, the better.
However, it will be a few months before mining has been redistributed and completely reorganized. Time in which the hash rate first has to be readjusted. Amazingly, an impending mining ban, or at least more controlled mining, has not yet triggered a wave of sales. Like the graphic from Cryptoquant shows, miners hold onto their reserves even during the market crash.
A good signal. With all of the panic selling and profit-taking currently pushing the market down, miners are stabilizing the gap between supply and demand.