When Will the Crypto Correction End? | Credit: Veronica Cestari
The Crypto market has fallen since May 24 and has accelerated its decline this week, likely due to escalating tensions between Israel, the U.S., and Iran.
Even though the market is down, crypto news has been positive since the U.S. Senate passed the GENIUS Act , the first comprehensive legislation for fiat-backed stablecoins.
The FOMC meeting is today, and the Federal Reserve will likely keep interest rates constant. A rate increase or decrease could cause the market to move in the opposite direction.
With numerous catalysts hovering over the market, let’s analyze a few charts and see the most likely future outlook.
Why the Crypto Market is Down
The Crypto Total Market Cap (TOTALCAP) increased by 50% between April 7 and May 23.
However, it has fallen 8% since, trading inside the $3.20 trillion horizontal support area.
Before the crash, the RSI and MACD generated bearish divergences (orange), often occurring before trend reversals.
The wave count strengthened the signal, showing a completed five-wave upward movement (green).
However, the price movement since the decline has not been that bearish. On the contrary, TOTALCAP bounced on June 5 (green icon) and reclaimed the $3.20 trillion horizontal support area.
The shorter-term six-hour chart suggests a bounce is close, but indicates the market is still correcting.
According to the wave count, TOTALCAP is in wave B of an A-B-C corrective structure, which could develop into a triangle structure.
In the past ten days, TOTALCAP has created a double bottom pattern (green icons) combined with bullish divergences in the RSI and MACD (orange).
This predicts a rally toward the triangle resistance trend line at $3.35 trillion.
So, while the trend may still be bearish, TOTALCAP will likely bounce in the short term.
Market Bottom Appears to Be Near
The Crypto market is down this week and risks breaking down from a horizontal support area.
However, TOTALCAP has created a bullish pattern, and the divergences suggest that a rally is close.
A short-term upward movement toward $3.35 trillion could occur soon.
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