The current situation in the crypto market is far from ideal. However, not all technical analysts think that nothing will change in the nearest future simply because the deepening of the bearish market is a temporary phenomenon.
Many indicators predict that the market as a whole is preparing for a reversal. While the preparation phase may take a while, it seems to be inevitable.
The Tuesday market was depressing
Many retail traders holding long market positions were taken aback by the contraction of all major coins.
On Monday, crypto enthusiasts were cheering as Bitcoin climbed over the $17K resistance level and started forming a new trend, but high spirits were crushed by the next day when the coin dipped under the $17K line again.
On Tuesday, it reached $16,900. On Wednesday, it was barely holding to $16,860.
The same was happening to Ethereum which lost about 1.3% overnight. Interestingly enough, major competitors of Ethereum like Solana and Algorand managed to gain some ground with the former gaining over 0.7%. However, both tokens plummeted on Wednesday.
Ripple is doing a little bit better, but even XRP was not able to hold to its gained ground and fell off on Wednesday after securing a notable increase in volume (17.3%) and price (0.8%).
The whole market is suffering following the FTX debacle. The overall market cap fell to just over $850 billion which is a significant contraction compared to just three weeks ago.
On the other hand, volumes across the board are falling meaning that the bearish market is close to its conclusion. While the overall trend may remain negative for a while, we can safely say that the immediate situation is indicative of a short-term reversal.
We have to keep our heads up
Retail traders are hunkering down and abstaining from selling low reducing trading volumes. It was notable on ETH and BTC with both experiencing significant volume reductions.
Many investors are still interested in funneling money into the crypto industry and their determination will sway more traders to rally for various crypto assets.