Hi traders, the market is looking heavy yet again.

Bitcoin.

• That rally from $6000 to $6800 is already showing signs of exhaustion, volume is decreasing and we've formed yet another bearish flag and failed to break back above prior support which has now turned into resistance.

• Interestingly, you'll notice that the selling volume has started to increase which to me could signal the start of an acceleration of the trend to the downside...

... which, if it materializes, could take us to $5700 on a capitulation candle to $5700 sometime in July...

... and probably to final capitulation to around $4500 in Q4.

...that is of course unless some extremely bullish news comes out of the G20 in July or large players decide that $6500 is indeed a fair price for Bitcoin and start accumulating/resuscitating the bull market.

Market still Overvalued.

This bearishness we've seen since December is, of course, a natural reaction to a two year bull market topped by a massive speculative bubble...

... the market is now looking at establishing a fair price for crypto assets, many of which (if not all of them) are still way overvalued due to their correlation to Bitcoin. Most DApp tokens in particular cannot justify their current market cap valuation relative to their number of users.

Let's take for example Airswap, an Ethereum-based DEX project currently valued at around $26 million USD:

According to DappRadar, a website that tracks the number of users of dApps, Airswap served only a total of 181 users in the past 24 hours.

So the app is not making any significant money and is probably operating at a loss yet is valued over $25 million USD. You'll also notice that there's been more value exchanged to speculate on the token (2,914 ETH) than was used to trade on the platform (53 ETH).

Not to bash on Airswap of course, the project is very legit but it encapsulates what's wrong in the market and the need for further devaluation to bring the crypto market back down to earth. Most of these dApp projects on Ethereum simply don't have a profitable business model (I suspect most don' even have a business model) and do not generate significant cash flow. Most will stay in operation until they've chew all the way through their ICO stash then will go bankrupt.

So, back to you dear readers, do you believe that the market is still way overvalued?