On Friday morning, Bitcoin started a sharp decline. At the time of writing, BTC was balancing at the level of $26,449. According to CoinMarketCap, the minimum price reached $26,584 over the past 24 hours, and the maximum was $27,589.
The day before, the crypto market was dominated by strong bearish sentiment. As a result, BTC fell by 3.24% on Thursday, dropping below the critical level of $27,000 and closing the day at $26,838. This pessimism was echoed by the top-10 cryptocurrencies by market capitalization, which also decreased in price.
As for Bitcoin’s behavior throughout the week, it was far from stable. For instance, at the end of Wednesday trading session, Bitcoin lost 4.96% and closed at $27,456. On Tuesday, the coin gained 0.25% and closed at $27,616. However, on Monday, the digital gold lost more than $1,000, falling below $28,000. The key reason for the Bitcoin downtrend at the beginning of the week was rumors about a possible collapse of Binance, one of the largest cryptocurrency exchanges in the world. On May 8, users withdrew more than $5.6 billion worth of BTC from the exchange, forcing Binance to suspend coin withdrawals twice due to network congestion.
Additionally, media reports have surfaced that the US Department of Justice has begun an investigation against Binance on suspicion of violating sanctions against Russia.
The key reason for the Bitcoin downtrend on Friday was the decline in US stock market indices the day before. Specifically, at the end of Thursday, the Dow Jones Industrial Average fell by 0.66%, and the S&P 500 dropped by 0.17%.
Notably, experts have recently observed a decreasing correlation between cryptocurrency and stock markets this year amid the current sideways movement of BTC price.
In late February, analysts at Bernstein reported that in the past month, the correlation between Bitcoin and the NASDAQ Composite Index had plummeted from 0.94 to 0.58.
According to Bernstein experts, the cryptocurrency market has recently been balancing between bullish and bearish trends, awaiting further catalysts. Meanwhile, its sensitivity to significant news and events in the financial world has noticeably decreased.
It is worth noting that at the beginning of 2022, analysts frequently emphasized the high correlation between the American stock market and the crypto market due to the tense anticipation of the consequences of the geopolitical conflict in Eastern Europe and further actions by the US Federal Reserve. For instance, in the middle of last year, experts at Arcane Research stated that the correlation between BTC and technology stocks had reached its highest level since July 2020.
Meanwhile, economists at Trading View claimed that the cryptocurrency market correlation with the US stock market in the fourth quarter of 2022 was 70%.
Altcoin Market
Ethereum, Bitcoin’s main competitor, also started Friday with a decline. At the time of writing, the altcoin was trading at $1,769 per coin. On Thursday, the cryptocurrency fell below the key level of $1,800, losing 3.65% in price and closing the day at $1,784.
As for the top-10 cryptocurrencies by market capitalization, all of them, except for a few stablecoins, traded in the red zone within the past 24 hours. Among them, Polygon had the worst performance (-3.79%).
Over the past week, all coins in the top-10, except for some stablecoins, have also incurred big losses. Polygon led the decline list with a drop of -15.69%.
According to the world’s largest crypto data aggregator CoinGecko, over the past 24 hours, Cosmos demonstrated the highest increase among the top-100 tokens(+1.41%), while the worst performer was Pepe (-35.99%).
Over the past week, among the top-100 strongest cryptocurrencies, Kava showed the best results (+6.62%), and the worst was Pepe again (-48.52%).
According to CoinGecko data, as of Friday morning, the total market capitalization of cryptocurrencies was above the important key level of $1 trillion and amounted to $1.082 trillion. In the past 24 hours, this indicator has dropped by 1.15%.
Since reaching its peak above $3 trillion in 2021, the cryptocurrency market capitalization has lost almost $2 trillion.
Crypto Experts’ Forecasts
As for analysts’ predictions regarding Bitcoin’s near future, most of them assume a positive scenario and speak of the virtual coin’s resilience.
Crypto experts claim that in the short term, the value of BTC will be in the range of $27,000 to $28,500. Specialists are confident that Bitcoin has every chance of overcoming the bearish trend, but it will require strong catalysts that are currently missing in the markets.
YouTube analyst Jason Pizzino is even more optimistic. He believes that even unfavorable events in the market will not be able to stop the digital gold rally, and the coin will soon reach the range of $32,000–42,000.
A similar opinion is held by BitMEX cryptocurrency exchange founder Arthur Hayes, who is confident that regardless of the financial path taken by the Federal Reserve and US authorities, BTC will rise to new price heights. According to Hayes, this will happen in conditions of high inflation and an increase in the key interest rate, as well as in the case of decreasing inflation and lower interest rates.
Recall that in April, BTC lost almost 10%. At the end of March, the coin’s value soared by 22.6%, showing an increase for the third month in a row amid the normalization of the banking crisis situation.
The first cryptocurrency ended February with an increase of 0.9% – to $23,200, and for the first month of 2023, it gained almost 40% in price, making January the best month for it since October 2021. Notably, January-March of this year proved to be the best quarter for the coin since the beginning of 2021, with BTC becoming one of the most profitable assets.
The key reason for the growth of the digital currency market since the beginning of 2023 has been the looming crisis in the traditional financial market. Today, stocks and bonds are going through a rather difficult period. That is why we are witnessing a constantly growing desire of investors worldwide to invest in virtual currencies.
The material has been provided by InstaForex Company – www.instaforex.com
The day before, the crypto market was dominated by strong bearish sentiment. As a result, BTC fell by 3.24% on Thursday, dropping below the critical level of $27,000 and closing the day at $26,838. This pessimism was echoed by the top-10 cryptocurrencies by market capitalization, which also decreased in price.
As for Bitcoin’s behavior throughout the week, it was far from stable. For instance, at the end of Wednesday trading session, Bitcoin lost 4.96% and closed at $27,456. On Tuesday, the coin gained 0.25% and closed at $27,616. However, on Monday, the digital gold lost more than $1,000, falling below $28,000. The key reason for the Bitcoin downtrend at the beginning of the week was rumors about a possible collapse of Binance, one of the largest cryptocurrency exchanges in the world. On May 8, users withdrew more than $5.6 billion worth of BTC from the exchange, forcing Binance to suspend coin withdrawals twice due to network congestion.
Additionally, media reports have surfaced that the US Department of Justice has begun an investigation against Binance on suspicion of violating sanctions against Russia.
The key reason for the Bitcoin downtrend on Friday was the decline in US stock market indices the day before. Specifically, at the end of Thursday, the Dow Jones Industrial Average fell by 0.66%, and the S&P 500 dropped by 0.17%.
Notably, experts have recently observed a decreasing correlation between cryptocurrency and stock markets this year amid the current sideways movement of BTC price.
In late February, analysts at Bernstein reported that in the past month, the correlation between Bitcoin and the NASDAQ Composite Index had plummeted from 0.94 to 0.58.
According to Bernstein experts, the cryptocurrency market has recently been balancing between bullish and bearish trends, awaiting further catalysts. Meanwhile, its sensitivity to significant news and events in the financial world has noticeably decreased.
It is worth noting that at the beginning of 2022, analysts frequently emphasized the high correlation between the American stock market and the crypto market due to the tense anticipation of the consequences of the geopolitical conflict in Eastern Europe and further actions by the US Federal Reserve. For instance, in the middle of last year, experts at Arcane Research stated that the correlation between BTC and technology stocks had reached its highest level since July 2020.
Meanwhile, economists at Trading View claimed that the cryptocurrency market correlation with the US stock market in the fourth quarter of 2022 was 70%.
Altcoin Market
Ethereum, Bitcoin’s main competitor, also started Friday with a decline. At the time of writing, the altcoin was trading at $1,769 per coin. On Thursday, the cryptocurrency fell below the key level of $1,800, losing 3.65% in price and closing the day at $1,784.
As for the top-10 cryptocurrencies by market capitalization, all of them, except for a few stablecoins, traded in the red zone within the past 24 hours. Among them, Polygon had the worst performance (-3.79%).
Over the past week, all coins in the top-10, except for some stablecoins, have also incurred big losses. Polygon led the decline list with a drop of -15.69%.
According to the world’s largest crypto data aggregator CoinGecko, over the past 24 hours, Cosmos demonstrated the highest increase among the top-100 tokens(+1.41%), while the worst performer was Pepe (-35.99%).
Over the past week, among the top-100 strongest cryptocurrencies, Kava showed the best results (+6.62%), and the worst was Pepe again (-48.52%).
According to CoinGecko data, as of Friday morning, the total market capitalization of cryptocurrencies was above the important key level of $1 trillion and amounted to $1.082 trillion. In the past 24 hours, this indicator has dropped by 1.15%.
Since reaching its peak above $3 trillion in 2021, the cryptocurrency market capitalization has lost almost $2 trillion.
Crypto Experts’ Forecasts
As for analysts’ predictions regarding Bitcoin’s near future, most of them assume a positive scenario and speak of the virtual coin’s resilience.
Crypto experts claim that in the short term, the value of BTC will be in the range of $27,000 to $28,500. Specialists are confident that Bitcoin has every chance of overcoming the bearish trend, but it will require strong catalysts that are currently missing in the markets.
YouTube analyst Jason Pizzino is even more optimistic. He believes that even unfavorable events in the market will not be able to stop the digital gold rally, and the coin will soon reach the range of $32,000–42,000.
A similar opinion is held by BitMEX cryptocurrency exchange founder Arthur Hayes, who is confident that regardless of the financial path taken by the Federal Reserve and US authorities, BTC will rise to new price heights. According to Hayes, this will happen in conditions of high inflation and an increase in the key interest rate, as well as in the case of decreasing inflation and lower interest rates.
Recall that in April, BTC lost almost 10%. At the end of March, the coin’s value soared by 22.6%, showing an increase for the third month in a row amid the normalization of the banking crisis situation.
The first cryptocurrency ended February with an increase of 0.9% – to $23,200, and for the first month of 2023, it gained almost 40% in price, making January the best month for it since October 2021. Notably, January-March of this year proved to be the best quarter for the coin since the beginning of 2021, with BTC becoming one of the most profitable assets.
The key reason for the growth of the digital currency market since the beginning of 2023 has been the looming crisis in the traditional financial market. Today, stocks and bonds are going through a rather difficult period. That is why we are witnessing a constantly growing desire of investors worldwide to invest in virtual currencies.
The material has been provided by InstaForex Company – www.instaforex.com
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