A drop in the price of bitcoin could drag down the entire altcoin industry, as low crypto liquidity is exacerbated by increased scrutiny from US regulators.
The most valuable digital asset is bitcoin (B T c) has struggled to keep up with the New Year’s crypto relief rally over the past two months. Trading around $26,699 on Monday, the price of bitcoin fell by about 1.7 percent over the past 24 hours. Still, the top coin is up nearly 60 percent YTD, outperforming the entire stock market index. The crypto market dominance in digital assets worth $517 billion was around 47.86 percent.
Notably, weekly bitcoin dominance has experienced increased resistance in recent days around 48 percent, indicating a potential market reversal. Such a narrative is also supported by the rise of crypto meme coins, which mostly signal the end of an era.
Money in circulation in the crypto market moves from large-cap altcoins to small-caps and then to mime coins as the bullish sentiment fades over time.
bitcoin analysis by michael kramer
According to a recent bitcoin price drop by respected market analyst Michael Kramer, the bitcoin price is on the cusp of a major capitulation. More. Well, the analyst said that there is a high probability for the bitcoin price to go back to the $20k level. After struggling to gain above $27k last weekend, the analyst said that the downtrend that started after topping $29.5k could drag bitcoin price down significantly in the coming days.
Watching #bitcoin $btcsd Here’s to the potential breakdown. Very good leading indicator for riskier assets in general. not positive for breakdown #stocks pic.twitter.com/HEdgXe2nEH
— Michael J. Kramer (@MichaelMOTTCM) May 21, 2023
As a result, Cramer stressed that the breakdown for bitcoin is not positive for the stock market, which is on the edge due to high inflation and a possible recession in the second half of 2023. The analyst compared bitcoin’s downtrend to the struggling S&P 500. Bullocks approx 4,200.
When the McClellan Summons Index deviates from the direction of the Equity Index, it sometimes does not give good results. But you can decide for yourself. pic.twitter.com/fMfLiX3gla
— Michael J. Kramer (@MichaelMOTTCM) May 21, 2023
more pain ahead
The growing geopolitical crisis between global superpowers has significantly fragmented international trade through sanctions, affecting normal supply chains. Europe is already cut off from Russia’s oil and gas supplies due to the ongoing war in Ukraine. As a result of increasing sanctions from the West, Russia has formed a trading bloc away from the United States dollar as the global currency reserve, along with several other countries including China, Brazil, India and South Africa.
The federal government of the United States has been blamed for printing money out of thin air at the expense of other countries that hold the dollar as a reserve currency. As a result, analysts Forecast The S&P 500 will move significantly lower from current levels in the coming weeks and months.
Late last week, the chairman of the Federal Reserve Jerome Powell He indicated that the time for a hike in interest rates is near. Notably, the Fed is struggling to bring inflation down to the desired 2 percent amid the banking crisis.
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