Bitcoin Bears Made Noise For A While But Now Flee The Scene
FxPro Financial Services Ltd | Mar 01, 2021 09:19AM ET
Crypto bears are getting louder and louder in the market, pushing the total crypto capitalization down $300 billion in a week.
Last week, Bitcoin twice received support on the decline to $45,000, on a 61.8% Fibonacci correction after the two-fold growth from late January to the February maximum of $57,000. That correction may have cooled the market briefly, laying the ground for a new upward momentum and updated highs.
Certainly, the focus is on Bitcoin and a few of the largest altcoins, but looking at the market from a broad perspective, altcoins are taking the biggest hit right now, showing double-digit declines. This is because smaller capitalization coins have been bought by non-professional retail investors, making them very volatile.
Ethereum, a leading altcoin at the correction's peak, was losing nearly $600 in a week. Although most market participants now declare what is happening as a natural process, which was quite predictable, they have become more cautious about the future.
The Fear & Greed Index for Bitcoin and major cryptocurrencies, which has fallen 56 points since last week to a value of "38," which corresponds to the "fear" mode, may also speak in favour of greater caution.
Once upon a time, the correlation between traditional and cryptocurrency markets was rejected by Bitcoin supporters. However, in just a few years, the situation has completely changed. Now, what is happening in the stock market is directly linked to the prospects of Bitcoin and the entire crypto market.
Rising yields on 10-year U.S. bonds provoke the closing of positions, which immediately affects the crypto market. Both markets desperately need good news to keep the party going. Bitcoin needs the next Elon Musk, and the stock market needs the promise of a non-stop money printing press. There are no guarantees in either case.
The FxPro Analyst Team
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.