On Monday, Bitcoin is rising. As of the time this article was written, Bitcoin was hovering around $27,442.
Data from the digital asset tracking website, CoinMarketCap, shows that Bitcoin's lowest price in the last 24 hours was $26,762, with the highest price reaching $27,282.
Last week was particularly challenging for Bitcoin. Over five trading days, the leading cryptocurrency broke through two significant psychological levels. Notably, Bitcoin plunged below $28,000 last Monday, shedding over $1,000 in a day. The key pressure point was rumors of a possible crash of one of the world's largest cryptocurrency exchanges, Binance. On May 8, users withdrew over $5.6 billion worth of Bitcoin from the exchange, forcing Binance to halt coin withdrawals twice due to network overload.
Additionally, media reports surfaced that the US Department of Justice has begun an investigation into Binance over suspicions of violating sanctions against Russia.
On Tuesday, Bitcoin briefly rallied, gaining 0.25% and closing at $27,616. Wednesday saw a return of bearish sentiment, with the leading cryptocurrency plunging by 4.96%, ending the day at $27,456. On Thursday, the coin continued to fall, losing 3.24% during the session, dropping below the key level of $27,000 for the first time since March and closing the day at $26,838. By Friday, Bitcoin had fallen further, finishing the trading week down by 1.96% at $26,337.
The market leader's pessimism last week was mirrored by the top 10 cryptocurrencies by market cap, all of which fell in price.
A significant pressure factor on digital assets was the decline in US stock market indices. The Dow Jones Industrial Average fell by 1.1%, and the S&P 500 dropped by 0.3% over the past trading week.
Interestingly, experts have been noting a decrease in the correlation between the cryptocurrency and stock markets this year against the backdrop of Bitcoin's flat price movement.
Analysts from the American investment company Bernstein reported this at the end of February. Last month, the correlation between Bitcoin and the NASDAQ Composite Index fell to 0.58 from 0.94.
According to Bernstein economists, the cryptocurrency market is currently fluctuating between bullish and bearish trends, awaiting catalysts. Its responsiveness to significant news and events in the financial world has notably decreased.
At the start of 2022, economists often highlighted the high correlation between the American stock market and the virtual asset market, anticipating the consequences of the geopolitical conflict in Eastern Europe and further actions of the US Federal Reserve. In the middle of last year, experts from the investment company Arcane Research stated that the correlation between Bitcoin and tech stocks had reached its highest point since July 2020.
Meanwhile, economists from the analytical platform TradingView stated that the correlation between the cryptocurrency market and the US stock market was 70% in the fourth quarter of 2022.
Altcoin market
Ethereum, Bitcoin's main competitor, also started Monday on a high note, trading at $1,830 per coin at the time of writing.
When it comes to the top 10 cryptocurrencies by market capitalization, they all traded in the green over the past 24 hours, excluding some stablecoins. Polygon stood out with a 2.27% increase.
Over the past week, all coins in the top 10, except for some stablecoins, dropped in price. Polygon led the decline, losing 7.55%, while Cardano topped the growth list and posted gains of 0.46%.
According to data from CoinGecko, the world's largest digital asset data aggregator, Conflux token had the highest increase of 11.78% among the top 100 most capitalized digital assets in the last 24 hours, whereas Klaytn had the biggest drop of 5.19%.
Over the past week, the best performer among the top hundred cryptocurrencies was digital asset Kava, surging by 45.80%, while Pepe had the worst performance, dropping by 31.89%.
As of Monday morning, the total cryptocurrency market capitalization was above $1 trillion, standing at $1.108 trillion. This indicator had increased by 1.55% over the past day.
Since reaching its peak above $3 trillion in 2021, the cryptocurrency market capitalization has lost nearly $2 trillion.
Crypto expert predictions
Regarding Bitcoin's near future, most analysts are predicting a positive scenario, emphasizing the coin's resilience.
Crypto experts suggest that in the short term, BTC's price is likely to hover between $27,000 and $28,500. They believe that Bitcoin has a good chance of reversing the bearish trend, but it would need strong catalysts that is absent in the markets.
YouTube analyst Jason Pizzino is even more optimistic. He believes that even adverse market events will not be able to halt Bitcoin's rally and predicts the coin may soon be trading between $32,000 and $42,000.
Arthur Hayes, the founder of the BitMEX cryptocurrency exchange, shares this viewpoint. He asserts that regardless of the financial direction taken by the Federal Reserve and US authorities, BTC will climb to new highs. In Hayes' view, this will happen both in conditions of high inflation and increasing interest rates, declining inflation, and lowering interest rates.
Bitcoin shed nearly 10% of its value in April. In contrast, the coin's value skyrocketed by 22.6% in March, marking its third consecutive month of growth amidst the normalization of the banking crisis situation.
Bitcoin wrapped up February with a modest 0.9% gain, reaching $23,200. In the first month of 2023, it surged nearly 40% in value, making January its best month since October 2021. Notably, the first quarter of this year turned out to be the coin's most prosperous since the start of 2021, positioning Bitcoin as one of the most profitable assets.
The impending crisis in the traditional financial market has been the main driver of the digital currency market's growth since the beginning of 2023. Currently, securities and bonds are going through a tough phase. This turmoil is precisely why we're seeing a persistent rise in investors worldwide keen on pouring their money into virtual currencies.
