The level of panic rises, will BTC fall below the $34,000 mark and will it fall next?

After a brief rally last week, the crypto market as a whole was in a downtrend, with no rebound over the weekend, and the broader crypto market is also in decline. In the early morning of the 9th, BTC fell below $34,000. This is the first time BTC has dropped below $34,000 since February.

The data shows that on May 8, the panic and greed index was 18, the degree of panic has increased, and the level is still extreme panic. According to Coinglass data, in the past 24 hours, the liquidation volume of the entire network reached 246 million US dollars, of which Bitcoin, Ethereum and LUNA liquidated the most, with Bitcoin liquidation of US$45.05 million, Ethereum liquidation of US$40.89 million, and LUNA liquidation of 759. Ten thousand U.S. dollars. Meanwhile, Bitcoin’s technical indicators continue to flash red, with Bitcoin well below the 50-day SMA.

Overall, investor sentiment on inflation and the Fed’s monetary policy continued to hit risk assets since heading into the weekend. The U.S. market was directionless until Monday, with bears still in control.

Technical indicators

According to the latest research from the blockchain analysis firm Glassnode, according to the analysis of the Mayer multiplier indicator, it is still in the midst of a crypto bear market. One of the most well-known Bitcoin indicators and one of the crypto community’s favorite indicators, the Mayer Multiplier is a simple ratio between the price and the 200-day moving average.

Despite its simplicity, it provides a strong and reliable long-term bottom and top formation indicator for the Bitcoin cycle. Glassnode plots a Mayer multiplier of 0.8x as a historically “undervalued” level, based on the fact that less than 15% of Bitcoin’s trading hours are at or below this level. With the 200-day moving average at $47,275, this 20% discount level is currently at $37,820.

This indicator suggests that the initial phase of the late bear market may have passed and the second half of the bear market may have been entered. However, based on previous cycles, it also suggests that it may be a while before the market provides enough demand and price appreciation to achieve sustainable profitability and capital inflows.

The general trend related to U.S. stocks is down

Bitcoin and other cryptocurrencies are increasingly in sync with U.S. tech stocks.

On May 7, the three major U.S. stock indexes closed down collectively, the Nasdaq fell 1.4%, and fell 1.54% this week; the S&P 500 fell 0.56%, and fell 0.2% this week; the Dow fell 0.3%, and fell this week 0.23%. Among them, the Nasdaq fell for five consecutive weeks, setting the longest record since 2012; the S&P 500 fell for five consecutive weeks, setting the longest record since 2011; the Dow recorded six consecutive weekly losses, setting the longest record since 2011. At the same time, Bitcoin also set a record for a 5-week losing streak.

Amid the overall downward trend, U.S. pension fund 401(k)s have been hit by the turmoil in the U.S. stock market. On a list of the 100 largest 401(k) funds provided by data firm BrightScope, there haven’t been any positive returns so far this year, and even the top performers have suffered losses, with all but 12 of the funds recording Double-digit losses. The ones that do well and suffer above single-digit declines are value-oriented or revenue-oriented strategies.

“Bearish sentiment continues to prevail as the Fed looks to slow inflation at all costs. This has resulted in a stronger correlation between stocks and cryptocurrencies over the past six months,” wrote cryptocurrency market analysis firm IntoTheBlock.

Lucas Outumuro, director of research at IntoTheBlock, noted, “I find it difficult for Bitcoin to establish a broader uptrend until the market starts to ignore the impact that quantitative tightening and rate hikes will have.”

The possibility of further decline?

Carter Braxton Worth, founder of Worth Charting, believes that Bitcoin could quickly drop another 13% to $30,000. Support dates back nearly a year to June 2021, when Bitcoin was around $29,000. This support level is likely to come into play as Bitcoin drops $1,200 to $34,600 over the past few hours.

One of the biggest risks is that Bitcoin falls further, becoming a risk-off asset as the Fed raises interest rates and fixed-income investing becomes an alternative. It also doesn’t have any moving daily EMA support.

In response to the current market situation, Kevin O’Leary, star investor of the “Shark Tank” investment show, said that Bitcoin remains in a very tight buying and selling range, and people who own BTC are actually not Not much, now only retail traders, high net worth traders, some hedge funds and professional funds hold BTC, but no sovereign wealth funds hold BTC. No sovereign wealth fund holds BTC, meaning there are no buyers to back the market when the cryptocurrency falls, and even with a small 1% sovereign mandate, that could change.

Galaxy Investment Partners CEO, fund manager and trader Mike Novogratz shared his thoughts on current market conditions, where he expects the Nasdaq to fall again, which is likely to affect the cryptocurrency market. Aside from betting on another slump in financial markets, Novogratz doesn’t expect a “soft landing” as the market has yet to experience a 50 basis point rate hike and massive outflows from risky assets such as stocks. Additionally, traders in the digital asset market suffered huge losses, with $400 million in long and even short orders being liquidated during a period of high volatility in the cryptocurrency market.

Additionally, former Goldman Sachs hedge fund manager Raoul Pal, CEO of Real Vision, said a potential decline in the stock market could threaten cryptocurrency price action in the coming months. Pal said he is watching the Nasdaq and said that from a technical analysis perspective, if the index fails to hold key support levels, the index may continue to fall, and the stock market faces the risk of a sharp decline. The current macro situation suggests a major correction is on the way, which could drag the digital asset down, though not lead to new lows. He also said that if the cryptocurrency ends up in a correction phase, he thinks there will be more noise in the overall market.

Posted by:CoinYuppie,Reprinted with attribution to:
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