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Everything bounces after China Bitcoin mining ban causes capitulation

2021.06.23 Adam James

Nearly every cryptocurrency is up today after a rough start to the week — but it's too early to start calling bottoms. 

The cryptocurrency market has bounced following a dramatic sell-off yesterday, with its total market capitalization currently up 6% on the day to $1.4 trillion. Market leaders BTC and ETH are up 7.6% and 6.1%, respectively — though, their seven-day declines total 16% and 22.2%. 

Many altcoins are also seeing major bounces — including SOL, which is up more than 36% over the past 24 hours.

The cryptocurrency market is a sea of green on Wednesday, with only stablecoins seeing negligible declines. Source: Coin360

Market sentiment is currently quite negative amid increasing pressure from China regarding its ban on Bitcoin mining — which may see upward of 90% of all mining in the country go offline. The regulatory actions and persistent selling in the market has once again plunged participant's fear to extreme levels.

The cryptocurrency market is currently extremely fearful. Source: alternative.me

DeFi market plummets below $50 billion

The decentralized finance market has not been spared by this week's downturn, which has dropped its total value locked well below $50 billion. Hit hardest is market-leader Aave, which is down substantially over the past 24 hours in terms of TVL, according to DeFi Pulse.

The total value locked in Aave has dropped significantly in recent days Source: DeFi Pulse

Top altcoin gainers and losers: Everything bounces

  • TMTG/USDT +151.69%
  • CVT/USDT +47.61%
  • RNT/USDK +32.66%
  • SBTC/USDT -3.06%
  • PMA/USDT -3.86%
  • AAC/USDT -4.86%

XRP is the top-performing major altcoin on OKEx today after increasing nearly 17%, followed not far behind by DOGE. No altcoin with a market capitalization of over $1 billion has lost value over the same time period.

XRP is the top-performing major altcoin on OKEx today. Source: OKEx

BTC technical analysis: Bouncing but in clear danger

The price of BTC has bounced from an area of expected buying interest but is now facing resistance at the four-hour ribbon of exponential moving averages. Failure to push through said ribbon may open the trapdoor to 26,000 USDT.

OKEx's BTC/USDT 4h chart — 6/23. Source: OKEx, TradingView

ETH technical analysis: Grinding down against BTC

The price of ETH is still struggling against BTC after falling through a descending support line — which may now act as resistance alongside the four-hour EMA ribbon. Failure to find buyers against the leading cryptocurrency may see ETH fall to 0.05 BTC.

OKEx's ETH/BTC 4h chart — 6/23. Source: OKEx, TradingView

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.