Bitcoin fell sharply last Friday, falling below the $30,000 level for a long time, after slipping to the $26,680 level earlier in last week's trading.

Bitcoin retreated strongly last Friday to fall below the level of $ 30 thousand for a long time, after slipping to the level of $ 26,680 earlier in trading last week. 24 hours a day.

The ongoing meltdown is not limited to digital assets, many prominent stocks have posted huge losses of more than 25%, Traders are unsure of the reason for such volatility in the stock and cryptocurrency markets, however, many believe that the Fed’s monetary tightening policies could be responsible Partly on account of these heavy losses, the Federal Reserve recently raised interest rates by 0.5% and also revealed its intention to sell bonds and other debt-related instruments to curb rising inflation.

Cross-chain data indicates that an increasing amount of panic is beginning to grip retail and institutional investors, with more and more bitcoin making its way back to many central exchanges, suggesting that investors are looking to cut their losses by dumping the asset.

Between May 6 and 9, the total number of bitcoins that made their way to 21 of the world's most popular cryptocurrency exchanges reached 37,537 bitcoins.

Bitcoin is trading around the $30,000 range

Bitcoin

The past 10 days have been somewhat volatile for bitcoin and the rest of the market, with the largest digital asset standing near $40,000 on Monday (May 9) before dropping by $4,000, then falling further in the next couple of days to find the coin itself struggling to recover. to stay above $30,000 by May 11.

However, it seemed almost inevitable that it would break below that level, and it happened on May 12 that Bitcoin tumbled nearly $5,000 to its lowest price since December 2020 at $25,300.

After this drop of $15,000 in about a week, it reacted well as it recovered around $6,000 on Friday and profited briefly from $31,000, however, it failed to maintain its upward momentum and fell back below $30,000, as such, Its market capitalization is just over $550 billion.

Bitcoin is currently trading above $30K indicating a loss of 54% since its all-time high in November 2021 at around $63K.

The correlation of crypto with the traditional finance sector is still very high

Although many critics have pushed the narrative that bitcoin is a hedge against the turmoil plaguing the traditional finance sector, digital assets continued to show an extremely high level of correlation with stocks throughout 2022.

Moved crypto markets And stock markets side by side lately, with the Dow Jones recently up more than 500 points only to fall again soon after, just like what Bitcoin has done over the past two weeks.

What awaits the market?

A market analyst says that the stock market could be on the verge of a small reversal in trend, which could provide a much-needed respite for bitcoin, if bitcoin can break through the $30,000 resistance level strongly, traders may be able to push the asset to 33,000 dollars in the short term.

Bitcoin Market Dominance Index rose to 45% its highest level in 6 months This indicates that traders may once again turn to Bitcoin as a long-term store of value, especially as financial volatility continues to destroy the market.

Mohamed Abdel Khaleq

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