The similarity in worth motion between the crypto and conventional monetary markets stays fairly sturdy on Might 10 as traders loved a relief bounce throughout asset courses following the Might 9 rout, which noticed Bitcoin (BTC) briefly dip to $29,730.
Market downturns sometimes translate to heavier losses in altcoins due to a number of elements, together with thinly traded belongings and low liquidity, however this additionally interprets into bigger bounces as soon as a restoration ensues.
A number of tasks notched double-digit positive aspects on Might 10, together with a 15.75% acquire for Maker (MKR), the protocol accountable for issuing the DAI (DAI) stablecoin, which possible benefited from the fallout from Terra (LUNA) and its TerraUSD (UST ) stablecoin.
Different notable gainers embody Persistence (XPRT) and its liquid staking token pSTAKE (PSTAKE), which skilled positive aspects of 16.4% and 39.8% after Binance Labs revealed a strategic funding in the liquid staking platform. Polygon (MATIC) additionally bounced again with a 14.59% acquire.
Correlation with conventional markets stays
Regardless of the extensively held perception that the crypto market would act as a hedge to TradFi volatility, the correlation between Bitcoin and the inventory market has remained excessive in 2022.
If something, the volatility normally related to the cryptocurrency market has begun to rear its ugly head in conventional markets, as evidenced by the worth motion for the Dow Jones Industrial Common on Might 10, which rose more than 500 points only to give back at the time of writing.
The Nasdaq and S&P 500 have fared a little better, notching gains of 0.9% and 1.92%, respectively.
Further evidence to support a correlation between crypto and traditional markets was provided by Bitcoin analyst Willy Woo, who posted the following chart noting that “Fundamentals [are] taking a back seat to fear driven trading.”
Willy Woo said,
“What I do think is we are not trading BTC, we are trading macro and equities. Right pane is SPX support, which will determine BTC directionality, left pane is the equivalent BTC support.”
Related: Michael Saylor assuages investors after market slumps hurts $MSTR, $BTC
The S&P 500 could drop much further
While May 10’s relief rally feels crypto and stock prices higher, market analyst Caleb Franzen posted the following chart warning about a bearish head and shoulders formation on the S&P 500 chart that might end in the lack of one other 500 factors.
Franzen mentioned,
“Exhausting to decide draw back targets after my $4,000 name bought hit, however I feel the MOST LIKELY help zone is down round $3,530–$3,590. That is the white resistance vary from September–October 2020.”
The general cryptocurrency market cap now stands at $1.444 trillion and Bitcoin’s dominance charge is 41.5%.
The views and opinions expressed listed here are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer entails danger, it is best to conduct your individual analysis when making a choice.
