The similarity in value motion between the crypto and conventional monetary markets stays fairly robust on May 10 as traders loved a relief bounce throughout asset lessons following the May 9 rout, which noticed Bitcoin (BTC) briefly dip to $29,730.
Market downturns usually translate to heavier losses in altcoins due to a number of elements, together with thinly traded belongings and low liquidity, however this additionally interprets into bigger bounces as soon as a restoration ensues.
Several initiatives notched double-digit positive aspects on May 10, together with a 15.75% achieve for Maker (MKR), the protocol chargeable for issuing the DAI (DAI) stablecoin, which possible benefited from the fallout from Terra (LUNA) and its TerraUSD (UST) stablecoin.
Other notable gainers embody Persistence (XPRT) and its liquid staking token pSTAKE (PSTAKE), which skilled positive aspects of 16.4% and 39.8% after Binance Labs revealed a strategic funding in the liquid staking platform. Polygon (MATIC) additionally bounced again with a 14.59% achieve.
Correlation with conventional markets stays
Despite the extensively held perception that the crypto market would act as a hedge to TradFi volatility, the correlation between Bitcoin and the inventory market has remained excessive in 2022.
If something, the volatility normally related to the cryptocurrency market has begun to rear its ugly head in conventional markets, as evidenced by the value motion for the Dow Jones Industrial Average on May 10, which rose greater than 500 factors solely to give again at the time of writing.
The Nasdaq and S&P 500 have fared a little higher, notching positive aspects of 0.9% and 1.92%, respectively.
Further proof to assist a correlation between crypto and conventional markets was offered by Bitcoin analyst Willy Woo, who posted the following chart noting that “Fundamentals [are] taking a back seat to fear driven trading.”
Willy Woo stated,
“What I do think is we are not trading BTC, we are trading macro and equities. Right pane is SPX support, which will determine BTC directionality, left pane is the equivalent BTC support.”
Related: Michael Saylor assuages buyers after market slumps hurts $MSTR, $BTC
The S&P 500 might drop a lot additional
While May 10’s relief rally despatched crypto and inventory costs greater, market analyst Caleb Franzen posted the following chart warning about a bearish head and shoulders formation on the S&P 500 chart that would end in the lack of one other 500 factors.
Franzen stated,
“Hard to pick downside targets after my $4,000 call got hit, but I think the MOST LIKELY support zone is down around $3,530–$3,590. This is the white resistance range from September–October 2020.”
The general cryptocurrency market cap now stands at $1.444 trillion and Bitcoin’s dominance charge is 41.5%.
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