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Bitcoin Falls below $30,000, Other Cryptocurrencies Follow Suit -Time for a Wake-up Call?

  • Bitcoin price is down 36% so far this year, trading below $30,000.
  • Ether, the coin linked to the Ethereum, the second largest cryptocurrency, declined more than 1% to $1,948.
  • Today, Dogecoin was trading lower at $0.08, while Shiba Inu also was down almost flat at $0.000012.

Cryptocurrencies have been caught up in a sell-off this year, which accelerated with the US inflation running hot and stoking investor fears about the economic impact of aggressive central bank tightening. The downturn in the crypto market, which started in April has wiped billions of dollars in market value within a month.

The price of bitcoin today slipped below the $30,000 mark after hovering around that level for the past few sessions. The world's largest and most popular cryptocurrency fell 0.3% and was trading at $29,706. The token is down 36% so far this year, and trading far below the peak of $69,000 it hit in November 2021.

Ethereum (ETH) has lost 59.85% after reaching $4,847.57 six months ago. Ethereum’s co-founder Gavin Wood is urging investors to be more aware of what is backing their holdings, saying “I would hope that people pay more attention to what is belying the currency name when they get involved in a community, ecosystem, economy”.

Terra increased more than 40% to $0.09 after developers behind the failed stablecoin voted to abandon the token in favor of creating a new blockchain and digital asset weeks after the cryptocurrency collapsed. Under the recovery plan for the Terra ecosystem, developers will create a new Terra blockchain with a revived Luna token.

Crypto Correlation with Stock Market?

In recent times, cryptocurrencies have been correlated with equities markets and more specifically stock indexes such as Nasdaq 100 and the S&P 500. This could mean that the crypto bear market will not end until the stock market bear run is finished. If cryptocurrencies are to follow the pattern, it could mean that the bearish sentiment could last another three months if history repeats and digital assets continue to follow the current correlation with equities. Unfortunately for crypto investors, S&P 500’s average drop of 37.3% is nothing like the lows the crypto economy has seen during extreme capitulation.

Outlook

Currently, crypto assets such as Bitcoin and Ethereum are seemingly at a turning point that may likely go one of the three ways. For example, the price of bitcoin may consolidate in this region for quite some time, the price may also rise again back into a bullish scenario if the market sentiment gains traction, or the value drops even lower from here, resulting in more capitulation.



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