The cryptocurrency market rallied today, continuing the gains from Friday due to a combination of technical and fundamental factors.
Oversold bounce across cryptocurrency market assets
On June 17, the cryptocurrency market capitalization grew by more than 2% to $1.05 trillion, up nearly 7.5% from the low $975.25 billion seen two days earlier.
Bitcoin (BTC), which now makes up nearly 50% of the crypto market, has rebounded 8.5% from its June 15 low of $24,750.
Meanwhile, the second largest cryptocurrency, Ether (ETH), is up more than 9% in the past two days. Last week’s worst performers, Solana (SOL), Cardano (ADA), and Polygon (Matic) also recovered 8-15% in the same period.
Interestingly, the cryptocurrency market capitalization started to recover a day after the daily relative strength index (RSI) reading dropped to around 30, indicating almost “oversold.”
From a technical perspective, an oversold RSI is prompting a price recovery or consolidation, as shown below.
Blackrock’s Bitcoin ETF buzz
In addition to the technical bounce, rising speculation about the first approval of a Bitcoin ETF in the US has also helped the cryptocurrency market bounce.
Notably, BlackRock, an investment firm that manages $9.5 trillion in assets, applied to the US Securities and Exchange Commission (SEC) for a Bitcoin ETF on July 16. Throughout its history, the company has applied for 576 ETFs, and has only faced one rejection.
The crypto market is up 4.5% since BlackRock’s implementation, according to market analyst Lark Davis anticipation The SEC approval can make the asset manager buy every bitcoin available via cryptocurrency trading platforms.
Excerpts from Davis’ statement:
“Only about 10% of all bitcoins (worth $50 billion) are on exchanges. 0.5% of BlackRock’s money transfers to BTC will buy every available coin.”
Related: Bitcoin price eyes ‘acceleration’ $26K region as Binance fears fade
However, the Securities and Exchange Commission (SEC) has rejected all Bitcoin ETF applications, including those from asset managers like VanEck, Ark Invest, and Bitwise.
Crypto market forecast for the second half of 2023
From a technical perspective, the cryptocurrency market has been ranged inside what appears to be a bull flag pattern since April 2023, which increases the odds of a continuation of the recovery trend towards $1.37 trillion in the second half of 2023 – up 35% from current valuations.
Conversely, the bears will try to push the market cap below the lower trend line of the bullish flag, risking completely invalidating the bullish setup.
In this bearish scenario, the cryptocurrency market will drop towards the next major support at $875.50B, which is an important level from the June-November 2022 and March 2023 sessions.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risks, and you should do your own research when making a decision.
