Bitcoin Price Hits Three-Month Low, What’s Driving This?
09 Mayo 2022 - 12:00PM
NEWSBTC
At this point, it is no longer news that bitcoin has now hit its
lowest point in three months. The last time the digital asset had
seen its price break below $34,000 had been in late January but had
continued to hold up well after this. Last time, the low market
momentum following the market crash on December 4th had been the
culprit. This time around, a whole different beast is behind the
wheel of the tumbling asset value. Stock Market On The Rocks
Bitcoin’s correlation with the stock market had been on the rise in
the past couple of months, eventually hitting a high point in the
first quarter of 2022. This correlation had continued to define the
market movements of cryptocurrencies over the last few months. In
multiple moves, the crypto market has been mirroring the stock
market and this same mirroring has triggered the recent downtrend.
Most notable has been the decline in the NASDAQ. Dominated by tech
stocks, the Nasdaq has taken a beating in the market. In the last
week alone, it has lost 1.5% and on a year-to-date basis is not
faring as well having lost about 22% in this time period. Related
Reading | Tron Is Trading Within Its Triangle Pattern; What
Awaits The Coin Next? As the Nasdaq went down last week, so has the
crypto market. One difference though has been that the tumble in
the crypto market has been more pronounced. It’s easy to see why
this is the case given that the largely unregulated crypto market
remains more volatile than its stock market counterparts. Hence,
coins like bitcoin have recorded about 10% losses in the last week.
Now, while the stock market correlation has had a hand in the
recent market crash, it is not the only reason for this. Market
sentiment had been declining in recent times and this has given
rise to more fear in the market. So a crash has been one that is
long in the making. Looking To The Future Of Bitcoin Since the
crypto market usually follows the movements of bitcoin, looking at
the future of this digital asset can often help to see where the
market might be headed. With the recent crash, the market has seen
more than $200 million taken off the total market cap but
indicators point out that this might only be the beginning. Bitcoin
had seen multiple bull rallies in 2021 in a pattern that is unheard
of in the market. These rallies which had seen the price hit an
all-time high of $69,000 have since subsided and are now naturally
giving way to the next bear market. Related Reading | TA:
Ethereum Bears Aim Big After Recent Breakdown Below $2.5K With the
decline, bitcoin is now trading below every significant short and
long-term indicator. Being under the 200-day moving average means
that investors do not believe that the digital asset will be
recovering above $40,000 anytime soon. Since BTC has now lost
its footing at its strongest support level, which was $36,000,
bears now have majority control of the market. It is likely that
the market will see BTC below $30,000 following this crash before
any significant recovery. Featured image from TIME.com, chart from
TradingView.com
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