Crypto Market Cap Holds Above $3 Trillion: Is Expansion Next?

• Crypto market cap holds above $3T, signaling strength; a sustained breakout could push prices toward new highs.
• A weekly close below $2.6T may invalidate bullish momentum, potentially leading to a deeper correction.
• Bitcoin dominance nearing 50% could drive a market-wide rally, but volatility remains a key factor to watch.

The cryptocurrency industry has held steady above the $3 trillion market valuation, according to analyst Honey. Following a breakout above the all-time high of 2021, there was a slight pullback to this important level for support. 

Market participants are now speculating whether this is an accumulation phase before another rally or a false breakout into a downturn. Traders remain divided, but the trend suggests a bullish outlook. A weekly close below $2.6 trillion could invalidate this bias, potentially sending prices toward last year’s low of $1.5 trillion.

Market Structure Remains Bullish

The market structure remains intact, forming higher highs and higher lows. This signals continued bullish momentum despite temporary pullbacks . The 2021 all-time high zone served as a resistance level before the breakout. Now, the market is retesting this level, attempting to establish it as support.

Source: Honey

If buyers continue defending this level, the market may rally toward new highs. However, failing to hold could lead to a correction. The next critical support zones are at $2.8 trillion and potentially lower levels. Increased volatility indicates active participation from both buyers and sellers at these price points.

Accumulation or Fakeout?

Market sentiment leans toward accumulation rather than distribution. The price has remained above $3 trillion for over two months. This strengthens the argument for continued bullish movement rather than a breakdown. Additionally, traders anticipate Bitcoin dominance to reach 50%, reinforcing a market-wide rally.

Despite the positive outlook, risks remain. If the market fails to sustain current levels, a downturn toward $2.6 trillion could occur. This would increase the likelihood of revisiting the $1.5 trillion low from last year. Consequently, traders are monitoring key levels closely, looking for confirmation of either scenario.