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According to recent data shared by IntoTheblock analytics, Bitcoin (BTC) and Ethereum (ETH) continue to maintain an extremely high correlation with the stock markets, with the 30-day correlation reaching as high as 0.9.
The thorny conclusion for Bitcoin bulls is that recent crypto market declines cannot be dissociated from the downturn in traditional markets. On Thursday, stock futures were under pressure again, with the S&P500 on the verge of a bear market. Fears that the Federal Reserve’s rate hikes to combat rapid inflation might send the economy into a recession resulted in investors selling stocks.
$BTC and $ETH correlation with traditional markets continue to be extremely high
Our correlation matrix displays how crypto is moving almost in tandem with traditional equities such as Nasdaq, S&P500 and Dow Jones
30-day correlation is above 0.9
Chart: https://t.co/Wx8RxQwatF pic.twitter.com/hsUbUMU9HH
For the second day in a row, Bitcoin has remained near $29K, causing the rest of the crypto market to suffer minor losses. Ethereum has lost 3.67% in the last 24 hours, although it is still trading near $2,000. The top 10 cryptocurrencies except stablecoins are all losing ground, with losses ranging from 0.36% (BNB) to 5.77% (Solana).
According to CoinMarketCap, the total crypto market capitalization fell 2.37% to $1.25 trillion. The dominance index for Bitcoin increased marginally to 44.8%. On Thursday, the Crypto Fear and Greed Index rose a few points to 13 and remained in “extreme fear.”
After the Federal Reserve raised interest rates by 50 basis points, or 0.5 percentage points, at its most recent Federal Open Market Committee (FOMC) meeting in May, stocks might be on the edge of a bear market.
Transaction history shows that 2.24 million addresses bought 26.33 million $ETH at $2,300.
Any signs of weakness might encourage these addresses to sell, which could see #Ethereum drop to its most important support at $700 where 13.25 million addresses hold 13.1 million #ETH. pic.twitter.com/5SE67MhHwh
Meanwhile, cryptoanalyst Ali Martinez sees that further weakness in ETH might lead to a drop to $700 as the “transaction history shows that 2.24 million addresses bought 26.33 million ETH at $2,300.” Any signs of weakness might encourage these addresses to sell, which could see Ethereum drop to its most important support at $700, where 13.25 million addresses hold 13.1 million ETH.”
Despite the potential for price declines, Bitcoin and Ethereum attract a lot of attention. At the week’s start, El Salvador President Nayib Bukele announced on Twitter a meeting of 32 central banks and 12 financial authorities from 44 countries held on May 16 to discuss financial inclusion and El Salvador’s Bitcoin rollout.
Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.
Disclaimer: Any financial and market information given on U.Today is written for informational purpose only. Conduct your own research by contacting financial experts before making any investment decisions.
