BREAKING - Bitcoin on 8th week losing streak amid weak appetite for crypto
Bitcoin led a drop in digital assets across board, with the world’s most valuable token expected tolose for the eighth week in a row, its longest such dip since August 2011.
Bitcoin’s price has dropped by 4% in the last seven days. Even though this may appear to be a significant loss, the overall market took a bigger hit.
Altcoins were hit far harder than BTC, resulting in Bitcoin’s dominance skyrocketing, buffeted by both macro headwinds from the U.S central bank monetary tightening and crypto-specific fallout from the TerraUSD algorithmic stablecoin’s implosion earlier this month, which continues to weigh on digital assets, particularly those related to decentralized finance.
What you should know
- In the past 7 days, Ethereum has lost roughly 12% of its value, followed by Cardano, which has also lost 12%, and Solana, which has lost a stunning 20% of its dollar value.
- In total, the crypto market dipped by $500 billion in market value in May, a drop of 29%.
- Digital assets fell for a second day, despite risk assets like stocks rising, signalling a departure from their recent lockstep relationship — and a hint of fragile belief that might augur a worrying trend.
- As investors gain confidence in the markets as a whole, they’re seeking new opportunities to buy on the cheap. They don’t want to be burned in the cryptos once more.”
- Ether, the second-largest cryptocurrency, and other altcoins tied to prominent DeFi projects such as Avalanche and Solana were among the worst performers on Friday, falling between 4% and 6%.
- Market data suggest that even popular collections like Bored Ape Yacht Club and CryptoPunks are under pressure in the nonfungible token market. Meanwhile, short interest in the first US Bitcoin-futures backed exchange-traded fund is reaching its all-time high, with investors increasing bearish bets since the fund’s debut in October 2021.
- With the fallout from Terra’s demise wreaking havoc on altcoins, Bitcoin now holds a bigger share of the cryptosphere, accounting for 44% of total market value. According to CoinGecko data, this is the highest level since October, just before the latest bull market peaked.
- But it’s not like Bitcoin is unaffected: It’s currently down about 60% from its all-time high in November, albeit it’s been trading in a $28,000 range.
- The tight association between cryptocurrencies and other risk assets has recently broken down, without a doubt. Digital assets have mostly remained on the sidelines while US tech equities rebound following weeks of stagnation.
As the Fed raises interest rates and begins quantitative tightening, the macro picture for risk assets remains bleak.
Low liquidity, increased leverage, and tightening monetary conditions “may lead to huge price fluctuations, and potentially greater downward volatility in the short term.”
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