Cryptocurrency Market Takes a Beating: Bitcoin Drops Below $30,000
Ethereum Tumbles Under $1,000
The cryptocurrency market experienced a brutal sell-off on Saturday morning, with Bitcoin (BTC) breaching $19,000 and Ethereum (ETH) falling below $1,000. This decline extends the ongoing crypto bear market, leaving Bitcoin down more than $10,000 from its record high.
Correlation with Stock Market Rises
The drop in crypto prices coincides with a sell-off in the traditional stock market. The two-month rolling correlation between Bitcoin and the S&P 500 index has climbed to 0.53 on Friday, the highest level since January 24. This suggests that cryptocurrencies are becoming more correlated with traditional assets.
Crypto Trading Volume Plummets
As the price of Bitcoin plunges, trading volume in the cryptocurrency market has also seen a steep decline. This indicates waning interest in digital assets, which may contribute to further price declines.
Dow Theory and Cryptocurrency Trading
Some analysts believe that the Dow Theory, a set of principles used to understand market cycles, can also be applied to cryptocurrency trading. According to the Dow Theory, the cryptocurrency market may be entering a downtrend, characterized by lower highs and lower lows.
Consumers' Pessimism About Crypto
Despite the surge in Bitcoin's price in 2024, some consumers remain skeptical about the token's prospects. This pessimism may further dampen market sentiment and contribute to the ongoing sell-off.
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