The crypto market shows a moderate decline, which is quite natural after the rally of the previous weeks. The total capitalization again exceeded the important psychological barrier of $2 trillion. The last time the crypto market was at this level was in mid-May. Despite the beginning of corrective pressure, the scale of the market pullback is still very small.
The Bitcoin dominance index continued to decline, falling to 43.6%, which indicates the presence of a wide demand for altcoins. Probably, the retail sector continues to believe in the long-term potential of the market, preferring to "diversify" investments in it beyond the already noticeably grown top coins.
The greed and fear index for Bitcoin and the largest cryptocurrencies has remained in the territory of “greed”since last week. According to the idea, the indicator in its current state should signal the approach of a correction, but in fact we have seen many times that both the traditional market and the crypto sector can ignore reality for a long time and continue to grow. Nevertheless, it can't last forever.
The hashrate in the Bitcoin network continued to grow and is currently at the level of November 2020. This level is far from the historical maximum, but there is no doubt that as autumn approaches, an increasing number of miners will start running their computing power.
It is generally assumed that the price of an asset also increases along with the growth of the hashrate. However, it is not only the price that is growing: along with the growth of the hashrate, miners are also faced with an increase in the complexity of calculations. Of course, this business remains very profitable, whereas after China expelled miners from its territory, it turned into super-profitable for some time at all.
Anyway, the cost of Bitcoin mining is one of the few physical metrics that are tracked by participants of the crypto market as a fundamental price driver. In this direction, everything may indicate a continuation of price growth.
If a new impulse is received, similar to Tesla's investment in Bitcoin, the crypto market can develop activity with a new force. In the meantime, he is at a crossroads. It is likely that the development of the situation with the incentives of the leading central banks, as well as the state of the leading economies of the world, will significantly affect the future of Bitcoin and the rest of the crypto market after it.
Even 3 years ago, the correlation with the traditional market caused strong rejection among holders of digital currencies. Now, when it was large investors who could prevent a broad correction of the crypto market, the attitude has changed, but we should not forget that institutional investors are still not crypto enthusiasts.