Investors in stocks as well as crypto made it very clear in the past month that we are in a risky environment.
Bitcoin, Ethereum, and other dominant cryptocurrencies were all down over the weekend, erasing the mild gains made during the previous week. The global crypto market capitalization dropped to $ 1.03 trillion, down 7.5% in just 24 hours, according to CoinMarketCap.
Bitcoin is down 18% over the past seven days and is down below $ 26,000 to $ 25,513, the lowest point in 2022 and the lowest in 12 months. Ethereum has gotten worse, down 28% in the past week, even after the most success join test drive on Ropsten testnet. (On Friday, Ethereum core devs shared their decision delay “difficulty bomb,” an important step in The Merge, over the next two months, which may not have helped sentiment about ETH.)
It’s not just BTC and ETH. Each of the top 20 coins by market cap has dropped a percentage point double in the past seven days.
BNB is down 22%in the last week, Cardano (ADA) is down 24%, XRP is down 18%, Solana (SOL) is down 31%, Dogecoin (DOGE) 28%, Polkadot (DOT) 28%, Avalanche (AVAX) 35%and Polygon (MATIC) 25%.
The crypto market doesn’t look stable all year after the big bulls in 2020 and 2021, but Crypto Winter is now starting firmly in the the first week of May, when major coins collapsed along with the stock market. Then the Terra ecosystem (UST and LUNA) burning in the fire (although a Chainalysis report this week linked The decline of Bitcoin is more for the selloff of broader tech stocks, not for Terra). Since then, technology stocks have continued to advance and crypto has been down. The roll increased a lot last week along with the CPI reading for the month of May, which reflects the price of consumer goods increase 8.6% compared to May 2021, the highest year-over-year inflation rate since 1981.
For many years, Bitcoin was established as a hedge against inflation, but it did not act as such in 2022, and in January of this year it was affected. the highest level of correlation with the S&P 500 and Nasdaq from 2020.
For the moment, crypto and tech stocks will go down together.
Increase in COVID-19 intoxication mix, geopolitical uncertainty, and continued negativity of notorious legislators about crypto and you have the possibility of creating a long-term bear market for crypto and equities.
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