With one particularly awful weekend behind them, Bitcoin and other cryptocurrencies are continuing their downward spiral. Bitcoin has dropped below $27,000 for the second time.
Bitcoin’s value declined 10.68% between Wednesday and Thursday morning; it lost 28.07% in the previous week; 30.50% in the previous month; and 43.27% in the previous year.
Bitcoin isn’t alone on the sliding board. Ether, the second-most traded digital currency, has dropped to $1,700, marking the first time the token has fallen below $2,000 since July. Ripple (XRP) (-23.48%) and Binance (BNB) (-10.9%) were among the crypto Top 10 to fall. Surprisingly, the US dollar has kept its ground and is now up 0.51%.
Bitcoin Gains Dominance Amid Blood bath
In the last 24 hours, the ETH/BTC trading pair has dropped 7.5% to 0.0663. The drop was part of a correction that started on May 11 when the pair was trading at a local high of 0.0768. This pushed Ether down by up to 13.75 percent against BTC.
Cryptocurrencies, like stock markets, have been under pressure in recent weeks. Money managers, traders, and investors, in particular, are showing symptoms of “de-risking” their portfolios as concerns about an increasingly hawkish Fed mount.
Ethereum, the second-largest cryptocurrency by market capitalization, has been affected by the same macro headwinds, and is presently trading at a 65% discount to its all-time high of $4,870 set in November 2021. In the same time frame, Bitcoin has fallen 63% from its all-time high of $69,000.
BTC/USD trades below $30k. Source:
On May 12, the Bitcoin Dominance Index – a gauge that measures Bitcoin’s market share against alternatives — climbed to nearly 45 percent, its highest level since November 2021. This could also indicate that, amid the current market instability, traders see Bitcoin as the safer choice — the “digital gold.”
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Although Bitcoin’s dominance has strengthened in recent days, as the price of Ethereum has broken lower against BTC, many investors’ questions remain.
Rekt Capital, a crypto analyst,
“Now that BTC Dominance is at the red level – what’s next? History suggests that every time BTC D challenged the red level – it broke. There’s a strong possibility that BTC Dominance can continue to the top of the black wedging structure over time.”
What Analysts Think?
Furthermore, if Bitcoin loses the macro range of support around $28,000, Rekt Capital predicts additional decline in the next months, if not weeks.
“If BTC completely loses this Macro Range BTC will enter a downtrend, peppered with recoveries before more down. Question is how long will this downside take. History has shown that downside can take months (slow-bleed) or weeks (crash then V-Shaped bottom),” he said.
Michaal van de Poppe, the CEO of Eight and a well-known crypto trading analyst, said:
“If BTC completely loses this Macro Range BTC will enter a downtrend, peppered with recoveries before more down. Question is how long will this downside take. History has shown that downside can take months (slow-bleed) or weeks (crash then V-Shaped bottom),” he said.
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Featured image from Shutterstock, chart from tradingview.com