Bitcoin and Ethereum crashed more than 10% at press time amid a marketwide rout as the global cryptocurrency market cap dropped sharply by 11.3% to $1.4 trillion.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
|Lido DAO Protocol (LDO)||-27.8%||$2.02|
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Why It Matters: Selling pressure was high on Monday, especially with tech stocks, as investors shed stocks, bonds and commodities. The S&P500 fell below the 4,000 mark to touch its lowest level since March 2021.
The dollar index hit its 20-year high on Monday at $104.090. The greenback has risen nearly 9% so far in 2022, according to a Reuters report.
While Bitcoin’s long-term fundamentals have remained unchanged, growth and recession worries have created a “very difficult environment” for cryptocurrencies, according to Edward Moya, a senior market analyst with OANDA.
“No one is looking to buy the crypto dip just yet and that leaves Bitcoin vulnerable here,” Moya wrote in a note, seen by Benzinga.
Macro headwinds aside, the cryptocurrency space is also facing another concern, according to GlobalBlock analyst Marcus Sotiriou.
TerraUSD (UST) lost its peg with the dollar after an alleged coordinated attack on the stablecoin, Sotiriou said. At press time, UST traded 25.26% lower over 24 hours at $0.74.
Even so, the analyst sees some positives in on-chain metrics, pointing out that the “percentage of Bitcoin which has not moved in a year is now at an all-time high.”
“This shows that the proportion of Bitcoin holders who are long-term HODLers is increasing, which is positive as it shows that short-term holders are selling to those with long-term conviction.”
If Bitcoin falls below $30,000 it will encounter very thin on-chain support, and the next important support zone is at $26,700, according to chartist Ali Martinez.
#Bitcoin shows very thin on-chain support below $30,000…
If #BTC breaches this psychological level, the next important support zone sits around $26,700 where nearly 52,000 addresses hold roughly 150,000 $BTC. https://t.co/2jJsZGmLrP pic.twitter.com/pER8pmNV5e
— Ali Martinez (@ali_charts) May 9, 2022
Cryptocurrency trader Michaël van de Poppe tweeted that the more he sees targets like $8,000 or $12,000 for BTC, the more convinced he is that “we’re getting into the end stages of this downwards run.” The trader said it’s a “tremendous opportunity” as the markets have capitulated already and altcoins are in a bear market for a year.
The more I’m starting to see targets like $8K or $12K for #Bitcoin, the more convinced I am we’re getting into the end stages of this downwards run.
It’s actually capitulation already.#Altcoins are in a bear market for a year.
It’s a tremendous opportunity.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2022