Following weeks of severe volatility of Bitcoin and other tokens, the cryptocurrency market has achieved slight advances in the previous seven days, garnering major capital inflows.
According to Finbold data, the cryptocurrency market had reclaimed the $1.9 trillion market size as of February 6, 2022, after accumulating $162 billion in the capital since January 31, 2022.
The total market capitalization was $1.7 trillion at the end of January. Large-cap assets like Bitcoin have led the recovery while struggling for a breakout for much of January.
Since the beginning of the year, the market has experienced widespread falls and has struggled to break out due to mounting concerns about interest rate hikes. At the same time, the sector’s link with stocks stood out because most shares fell in January as well.
Bitcoin surpasses the crucial $40,000 mark
Bitcoin is leading the comeback, having surpassed the critical $40,000 mark. By press time, the asset was trading at $41,500, up nearly 10% in the previous seven days.
Bitcoin saw an overnight rise following a spike in technology equities headed by Amazon (NASDAQ: AMZN). Notably, digital currency has demonstrated a high link with technology stocks in recent months.
The top-ranked cryptocurrency is also pulling the rest of the market along, with Ethereum rising about 15% in the last seven days. During the same time period, Solana (SOL), Avalanche (AVAX), and Polkadot (DOT) have increased by 19%, 10%, and 13%, respectively.
Validation for Bitcoin’s recent upward reversal indicators
Technical indications have recently pointed to an upward reversal for Bitcoin above the $40,000 barrier. According to Finbold, Bitcoin has seen a succession of bearish and bullish price swings, resulting in the construction of a spreading falling wedge (or descending broadening wedge). Historically, the pattern has indicated an impending price increase.
Within 24 hours of Bitcoin’s recovery, around 72,700 dealers liquidated from the market, totaling $270.8 million across all cryptocurrencies.
Despite a large downturn in the market and Bitcoin in 2022, the asset continues to gain traction in various areas. According to Finbold, after GoFundMe blocked donations to Canadian truck drivers protesting the Covid-19 ban, well-wishers turned to Bitcoin as an alternative. Donations had topped $9 million before the suspension.
Following the recent increases, the question will be whether bitcoin and the rest of the market can maintain the trend.