Bitcoin is now better than the stock market but still in decline
|On Wednesday, Bitcoin was down 3%, ending the day around $29,200, remaining near that mark on Thursday morning. Ethereum lost 4.3%. Other altcoins in the top 10 fell from 1.8% (BNB) to 9.8% (Cardano). The total capitalisation of the crypto market, according to CoinMarketCap, fell 3.6% overnight to $1.24 trillion. The Bitcoin Dominance Index rose 0.4% to 44.7%. The Cryptocurrency Fear and Greed Index was up 1 point to 13 by Thursday and remains in ‘extreme fear’ territory.
Bitcoin resumed its decline on Wednesday amid a sharp weakening of US stock indices, which fell even more than BTC. The Nasdaq and S&P 500 lost more than 4% on Wednesday. The impressive oversold strength accumulated by the crypto market after it collapsed 40% from late March levels (versus 16% for the S&P500) temporarily limits the declining scale.
Nevertheless, the overall negative market sentiment has prevented the bulls from turning out in full force. So far, it isn’t easy to see reliable signs of oversold or rebound formation. We should be prepared for the cryptocurrency market to test support at last week’s lows again in the near term. We consider the area near 20K the final target for a potential selloff, which corresponds to Bitcoin’s long-term support line.
Among the news that caught our eye were:
Former US Federal Reserve chief Ben Bernanke called Bitcoin a harmful currency. He lashed out at cryptocurrencies, calling them “a great tool for extortionists”. Binance lost $1.6 billion due to the collapse of Terra tokens on the exchange’s balance sheet.
Billionaire Bill Ackman said one of the main reasons for Terra’s collapse was a pyramid scheme of business. Investors were promised a 20% yield backed by a token whose value was determined by demand from new investors.
South Korea’s Financial Services Commission, amid tensions in the Stablecoin market, is proposing to register cryptocurrencies based on their level of risk to investors. Microsoft has warned crypto investors of an increase in the activity of a new type of malware called Cryware, which allows the theft of assets from hot cryptocurrency wallets. Birgit Rodolph, executive director of the German BaFin, called for universal regulation of the DeFi industry across the EU.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.