After a week of continuous crashing accumulating to over 50% losses for some top cryptocurrencies, a light begins to open up for the crypto market, the market recovering and shifting back to its original position.
Briefing
Overall, the market has made itself back on the right track, decently rising for many cryptocurrencies, which would be sought for many after a week of continuous losses. Not only has there been a recovery in price, but in position as well, cryptocurrencies moving back to where they should belong before the crash. Some of the major features will be gone through, but it is to be noted that many other events have occurred which are missed.
When going to the top 100 and putting the highest losses within the past 24 hours, only three cryptocurrencies come up with losses, and even then they are small (ignore cDAI further down the leaderboard since it is for a US stablecoin). These cryptocurrencies which have experienced a loss are Amp (AMP - -4.4%), Klaytn (KLAY - -1.6%) and Filecoin (FIL - -0.4$). As evident with the listed losses, they are small in comparison to the huge dumps a few days back going over 20%, thus indicating the slowing down of the market and beginning of a recovery. When moving down to the first gainers, it can be observed that they are quite small. This stresses the slowing down of the market and the potential bullish pattern that is to follow.
However, there have been cryptocurrencies with considerable gains over the past 24 hours, including the 2 crypto kings Bitcoin (BTC - 6.5%) and Ethereum (ETH - 9.1%).
Looking at the top 10, it is evident that the market is beginning to go back to have it was supposed to be. The big one to see is Binance Coin (BNB). Not only has it shifted up to 5th place, but is now also closing the gap between itself and Cardano (ADA), currently about $1 billion. From this movement it is expected that BNB will surpass ADA within a few days, thus challenging the following cryptocurrencies Tether (USDT) for 3rd place. In this duel, BNB is also expected to win within a few days after its victory over ADA. A bullish market is predicted from the beginning of a recovery, many people now looking at buying to boost the price, though it is always possible that the market will continue to sink.
Going into the top 10 according to 24h volume brings out interesting information. USDT is still sitting in the top with a wide margin of over $100 billion beneath its challenger BTC below, but what is significant to note is the change in cryptocurrencies for the 24h volume. USD Coin (USDC) is no longer within the top 10, Binance USD (BUSD) now sitting at 4th place, a great movement from what it was yesterday. This indicates that more people are moving into USDT and BUSD as opposed to other US stablecoins like USDC. Dogecoin (DOGE) and Ethereum Classic (ETC) are also up there, two cryptocurrencies that have mooned within the past months, thus indicating that people are expected these cryptocurrencies to moon further up. BNB also makes an appearance at the bottom, its use and reputation seeming to recover.
Reasons For Market's Recovery
A lot of reasons are out there explaining the cause of the market recovery, but really there is only one reason for why this has occurred, branching into different cases. Some of the major cases will be gone through, though it is important to recall that there are still many other cases not mentioned that contribute to the reasoning of the market's recovery.
The main reason that the market has recovered is that the price has gone low enough to attract more buyers than sellers. It is as simple as that. The market cannot continue crashing and crashing - people also buy crypto. And this is the time where people are buying, finding that after a week of continues crashing, it is now the time to buy. Since recovery is now in view, many other people will follow, and this brings the prediction of a bullish period to now come.
One case to look at for this reason is the supply/demand law. In its essence, where there is a higher supply, there is a lower price and vice versa. Where there is a higher demand, there is a higher price and vice versa. What has happened to the market is that both the demand and supply has dumped, people looking to sell the crypto they have and sit at a safe point to wait for the moment to strike, and this brings the price to dump as well. Now that price is at an attractive point, the demand begins to boost, and this brings up the price. Since there comes a higher price, there is now also an even higher demand, and this brings the bullish period. However, it is also important that with higher demand comes higher supply, and this higher supply can outpace the demand to bring it neutral or even down, though it is unlikely in the crypto scope from the strict rules in place for distributing its money as opposed to real-world money (i.e. $USD, $CAD and £GBP).
Another case to look at it is in the scope of FUD (Fear Uncertainty Doubt). When the crash first occurred for a mix of reasons, including China's crackdown on crypto and Elon Musk's tweets, many people may have at first thought that the market will quickly recover on its first day. But it did not, continuing to fall for a week with hardly any hopeful news. Each day more and more people become panicked, thinking that their crypto will soon reach nil or they will face enormous losses, and thus migrate from their investment into a safe spot, either cashing out or going into the trusty US stablecoins. Since so many people freak out, even more people freak out, and this can worsen with misleading/fake news that discredits the crypto market. Now after a week, people are beginning to calm down and reconsider their views and stance, many turning back into investing crypto to boost it back up. Crypto has not died from the strict regulations that have happened, and the market is now slowing down, so it appears that now is the best opportunity to go in, and that is what people are doing.
Further Reading
There are not many articles on the recovery, so some semi-related/interesting articles will be given.
be[in]crypto - EXCLUSIVE: Five Best Altcoin Performer Showcase: May 17-24 - https://beincrypto.com/five-best-altcoin-performer-showcase-may-17-24/
The Block - An updated look at DeFi audits and bug bounties - https://blockonomi.com/crypto-market-crash/
coinnnouce - Ripple is not behind bitcoin’s energy use FUD, says Ripple CEO. - https://coinnounce.com/ripple-is-not-behind-bitcoins-energy-use-fud-says-ripple-ceo/
be[in]crypto - Vitalik Buterin Discusses Elon Musk’s Problematic Dogecoin Scalability Claims - https://beincrypto.com/vitalik-buterin-discusses-dogecoin-scalability-claims/
https://read.cash/@TalatKiani/what-is-a-bitcoin-wallet-ec27246b