Altcoins stage a relief rally while Bitcoin traders decide whether to buy the dip

The similarity in value motion between the crypto and conventional monetary markets stays fairly sturdy on Might 10 as merchants loved a reduction bounce throughout asset lessons following the Might 9 rout, which noticed Bitcoin (BTC) briefly dip to $29,730.

Market downturns sometimes translate to heavier losses in altcoins on account of quite a lot of elements, together with thinly traded property and low liquidity, however this additionally interprets into bigger bounces as soon as a restoration ensues.

Day by day cryptocurrency market efficiency. Supply: Coin360

A number of tasks notched double-digit positive aspects on Might 10, together with a 15.75% achieve for Maker (MKR), the protocol chargeable for issuing the DAI (DAI) stablecoin, which seemingly 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 within the liquid staking platform. Polygon (MATIC) additionally bounced back with a 14.59% gain.

Correlation with traditional markets remains

Despite the widely held belief that the crypto market would act as a hedge to TradFi volatility, the correlation between Bitcoin and the stock market has remained high in 2022.

If anything, the volatility usually associated with the cryptocurrency market has begun to rear its ugly head in traditional markets, as evidenced by the price action for the Dow Jones Industrial Average on May 10, which rose greater than 500 factors solely to offer again on the time of writing.

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The Nasdaq and S&P 500 have fared just a little higher, notching positive aspects of 0.9% and 1.92%, respectively.

Additional proof to assist a correlation between crypto and conventional markets was supplied by Bitcoin analyst Willy Woo, who posted the next chart noting that “Fundamentals [are] taking a again seat to concern pushed buying and selling.”

BTC/USD 1-week chart vs. SPX 1-week chart. Supply: Twitter

Willy Woo stated,

“What I do assume is we aren’t buying and selling BTC, we’re buying and selling macro and equities. Proper pane is SPX assist, which is able to decide BTC directionality, left pane is the equal BTC assist.”

Associated: Michael Saylor assuages investors after market slumps hurts $MSTR, $BTC

The S&P 500 might drop a lot additional

Whereas Might 10’s reduction rally despatched crypto and inventory costs greater, market analyst Caleb Franzen posted the next chart warning a couple of bearish head and shoulders formation on the S&P 500 chart that might outcome within the lack of one other 500 factors.

SPX/USD 1-day chart. Supply: Twitter

Franzen stated,

“Onerous to select draw back targets after my $4,000 name received hit, however I believe the MOST LIKELY assist 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 fee is 41.5%.

The views and opinions expressed listed below are solely these of the writer and don’t essentially mirror the views of Each funding and buying and selling transfer includes danger, you need to conduct your personal analysis when making a call.