On Monday, May 9, BTC reached its lowest level since the summer of 2021. The price of the top cryptocurrency fell below $31,600.
According to CoinGecko, BTC has fallen 7.6% in the past 24 hours and 17.8% over the week. All of the top 10 crypto-assets by market cap are in the red zone, following the leader.
Ethereum is trading at $2198, losing 7.9% overnight. BTC’s dominance rate stands at 43.7% and ETH at 20.3%.
The daily volume of liquidations in the market exceeded $903 million, according to Coinglass.
The unfavorable market outlook has caused the Fear and Greed Index to drop to as low as 11 points, signaling extreme fear.
What do analysts think?
On May 8, Glassnode’s top analyst, who goes by the moniker Checkmate, noted that “many people are waiting for bitcoin to capitulate”.
The latter is usually characterized by a relatively prolonged, sudden, and catastrophic price drop similar to the March 2020 collapse.
Analyst Caleb Franzen also pointed out the downward trend and said we should not “expect more pain.”
On May 5, after a brief spike in prices amid the Fed’s increase in interest rate, the price of the first cryptocurrency began to plummet, coming close to the $35,000 mark.
In April, former CEO and co-founder of the BitMEX exchange Arthur Hayes predicted bitcoin would fall to $30,000 at the end of the first half of the year. He linked it to a possible decline in the Nasdaq 100 Index (NDX), with which digital gold is highly correlated.
Arcane Research analysts confirmed that the statistical correlation between bitcoin and the Nasdaq index is at its peak since July 2020.
Recall, Factor LLC trader Peter Brandt said the price of digital gold would fall to $28,000.
Why is the market sinking?
There are at least three reasons why the market may have gone so deep south.
The first is global macroeconomic uncertainty. Global economies are struggling with historically high inflation due to the pandemic. What’s more, there is warfare going on in Ukraine, which is also not having a positive impact on the markets.
The second reason could be the sharp sell-off in whales and the large inflows of BTC into the exchanges. Such a situation usually suggests that whales are leaving the market and can be interpreted as a preparation for longer declines.
Technical indicators are not particularly favorable for BTC either. The major cryptocurrency has closed six consecutive weeks in the red and opened the seventh also in decline. The market hasn’t experienced such a situation in 8 years and this is certainly a testament to the fact that investors are closing their positions.