The crypto market has suffered heavily as of late. Since the middle of April, bitcoin and many of its counterparts have struggled to stay above certain price levels. At the time of writing, for example, BTC – the world’s largest and most popular digital currency by market cap – has fallen once again below $30K, sending many analysts and traders into a panic.
Bitcoin Is Dipping Fast
Now, several of these individuals have a new reason to worry. The stock market continues to droop and fall into very dark places. Several analysts are wondering that the correlation between stocks and bitcoin will take on a larger form and ultimately cause the crypto market to shed even more weight in the coming weeks and months.
The bottom line is that 2022 is shaping up to be an exact repeat of 2018, which up to this point in time, was considered one of the worst years for the digital currency arena, and there is the possibility that things could get worse before they get better.
Overall, as much as $1 trillion has been wiped from the crypto slate. Sam Kopelman – UK manager of bitcoin and crypto exchange Luno – explained in a recent interview that bitcoin is, in a way, gaining steam given that the recent collapse of Terra – an alleged stable coin – has caused many traders to have complete fear of the altcoin market. Thus, despite its price dips, bitcoin still looks far more stable and comfortable, and they are putting their money into the crypto industry’s primary coin.
The market clearly remains in a state of fear, caused by the de-pegging of [collapsed stable coin] UST, as well as fear spillover from the broader financial markets… Current fear in crypto markets is pushing capital that was previously invested in altcoins into bitcoin, a mark of the coin’s relative strength in comparison to others.
Alex Kuptsikevich – a senior market analyst at FX Pro – commented:
[The] panic selloff in the markets and the persistence of investor anxiety heralds the approach of a panic peak. 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 $20,000 the final target for a potential selloff, which corresponds to bitcoin’s long-term support line.
Could Things Get Worse?
In all, he believes that bitcoin could fall another $9 or $10K in the coming weeks before bottoming out.
Just a few weeks ago, all major markets in the United States dropped significantly, with the S&P 500 falling as much as four percent. This was its greatest dip in nearly two years.