The worst week for the cryptocurrency market since November 2022 is coming to an end as its capitalization attempts to stay above $1 trillion.
Price trends across the cryptocurrency market remained in a downtrend on Aug. 19 as the total market capitalization tries to stay above $1 trillion.
Bitcoin price has also been unable to hold the $26,000 level as the markets moved into the weekend.
Bitcoin leads crypto market losses
The major down-move this week occurred on Aug. 17 following Elon Musk’s SpaceX reportedly writing off its Bitcoin stash as well as several other major reasons.
![](https://s3.cointelegraph.com/uploads/2023-08/28d289c5-3fbb-469e-b3a1-64dbe8a1fb49.png)
Bitcoin, which controls nearly 50% of the total cryptocurrency market, reacted negatively to the SpaceX news as the selloff worsened amid a “bloodbath” of mounting liquidations across the crypto derivatives market.
As of Aug. 18, around 176,300 traders had liquidated $1.04 billion worth of contracts, with long exits making almost 80% of it. In other words, a long squeeze forced traders to sell at a loss to avoid even bigger losses.
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Macro risks pressure crypto lower
The decline across the crypto market mirrored losses in the global stock market.
Notably, the MSCI World Index, which includes large and mid-cap stocks from twenty-three developed countries, dropped sharply on Aug. 17, as shown in the chart below. This coincided with mounting worries about China’s economy and higher interest rates.
![](https://s3.cointelegraph.com/uploads/2023-08/79a8f055-a506-49a9-a485-837cffd183ae.png)
The economic slump in China has raised concerns that their central bank will weaken the yuan to boost its economy — something that could negatively impact the crypto market, particularly in the short term.
The last time China devalued the yuan in August 2015, BTC price dropped by 23% in the following two weeks, while the crypto market lost 27% in the same period.
![](https://s3.cointelegraph.com/uploads/2023-08/c22fcf1e-5b53-4bd3-916a-4869b75423d6.png)
“Head-and-shoulders” hints at more pain
Meanwhile, the crypto market’s technicals aren’t painting a rosy picture either. The current decline is forming a potential head-and-shoulders (H&S) on the weekly chart, raising anticipations about more losses in 2023.
H&S is a bearish reversal indicator that typically resolves after the price breaks below its support line (or neckline). As of Aug. 18, the crypto market tested the H&S neckline for a potential breakdown move.
![](https://s3.cointelegraph.com/uploads/2023-08/68b34bdf-8aaf-4781-b3dc-3b98dcde970e.png)
If the pattern is plays out, its downside target for 2023’s end or early 2024 will be around $751 billion, down over 25% from the current valuation.
On the other hand, the bulls will attempt a recovery toward the 50-week exponential moving average (50-week EMA; the red wave) near $1.113 trillion in 2023.
Holding the important 200-week EMA (the blue wave) level near $1.08 trillion as support will be crucial for the bulls moving forward.
Source: Cointelegraph.com