The total cryptocurrency market capitalization briefly soared to $3.8 trillion over the last 24 hours, surging to hit $3.8 trillion before hitting a wall of sell pressure. The rally quickly faded as trading volumes dropped by 20%, pulling the market cap back down to now at $3.67 trillion. Sell Pressure Dominates Binance According to analyst Amr Taha, what stopped the crypto market cap surge, can be seen from on-chain data sourced from CryptoQuant that shows a rise in aggressive selling on Binance. The exchange’s cumulative net taker volume fell sharply below -1.5 billion USD on August 1, a pattern last seen during a similar dip on July 25, which is reflective of a surge in aggressive sell-side orders, primarily driven by a cascade of long liquidations. Source: CryptoQuant This suggests that the long positions, likely opened by retail traders during the rebound, were forcefully liquidated, adding to the selling pressure. This claim is further supported when we look at the funding rates on major exchanges like Binance, which have turned negative. This can only mean that there are now more traders are betting on the price to go down, a bearish shift in sentiment. Source: CryptoQuant Historically, such bearish crowding often signals local bottoms, as overextended short positions may face squeeze scenarios if sentiment abruptly shifts. Related: Eric Trump Says ‘Buy the Dip’ on BTC and ETH; Here’s What Happened Last Time Key Technical Test for the Crypto Market A closer look at the TOTAL crypto market cap daily chart reveals that the market recently completed a strong impulsive move upward and hit a key resistance zone. The rejection came just shy of the 0.236 Fibonacci retracement level (around $3.93T), suggesting this might be a healthy correction in a broader uptrend, if support holds above $3.4T. Source: TradingView Current market cap is hovering slightly above the 0.0 Fib retracement ($3.64T), a critical short-term support. If bulls fail to defend this level, we could see a deeper correction toward the $3.4T–$3.2T zone, before any meaningful recovery attempt. Indicators such as RSI are pointing to weakened momentum, falling to around 49 from recent overbought conditions. The MACD also shows signs of a bearish crossover, hinting at further downside risk unless bulls step in decisively. Watch these levels; not the noise While the market cap touched $3.8T, technical resistance and liquidity fragility triggered a swift pullback. The $3.64T–$3.4T range remains the key battleground. A bounce from here could re-ignite bullish sentiment, targeting the next Fibonacci levels around $4.07T (0.382 Fib), $4.18T (0.5 Fib), and $4.3T (0.618 Fib). Breakdown below $3.4T, however, could push the market down toward $3.0T and potentially trigger another wave of panic selling. Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.