Gate.ioBlogMarket Trend 2/5 - 8/5｜Bitcoin back to 2022 lows，altcoins bleed
Market Trend 2/5 - 8/5｜Bitcoin back to 2022 lows，altcoins bleed
09 May 11:55
This week seems to have officialized what many feared, as months of sidelined volatility across the board finally brought Bitcoin and the rest of the crypto market to a plummet.
The standout market-mover of this week is definitely the Federal Reserve, which announced in the last FOMC meeting that rates will be hiked once again - now by 50 basis points with balance sheet roll-offs of $47.5 billion a month until September. Fed Chair Jerome Powell stated that, while 75 bps hikes are not being officially considered at the moment, they’re not off the table either.
The following week will certainly be one of great uncertainty, and should be approached with much more observation than action.
After two months of intense volatility mostly between the $38k and $42k zones, Bitcoin finally broke down to its previous low on February 21st of $37.7k, currently edging for lower breaks around $37.4k. Since its 2022 peak of $47.7k, Bitcoin dropped a staggering 25% in just a couple of months, almost reaching the 50% mark under its previous all-time high.
As the Crypto Fear & Greed Index marks “Extreme Fear” at 18/100, the downwards trend in Bitcoin is marked by a clear spike in uncertainty from both institutional and retail investors - as new policy proposals coming from mostly the United States and European Union show further interest in cracking down against unregulated crypto investments, FED hiked rates once again and tech stocks continues plunge inevitably affects the technological aspect that the cryptocurrency market has always been a part of.
Bitcoin value over the past couple months. Source: CoinGecko
Throughout this following week, a breakout above $38k is hard to expect since it took quite a while for Bitcoin to get back to its previous lows of the year and overall investing sentiment across the world has been quite negative. The scenario is extremely unstable for markets in general, so keep an eye on whale activity and the rate of new Bitcoin addresses.
With Bitcoin now lower than its previous 2022 lows, altcoin season seems to be a far-away dream as plenty of high-level projects bleed even lower. Along with Bitcoin, alts downturn brought the global market cap back to $1.58 trillion, almost half of September 2021’s highs.
ApeCoin (APE), the promising metaverse-aiming crypto from Bored Ape Yacht Club, faced the biggest loss of the week at 39.5% and 54% lower than its ATH. Some would say it was inevitable, after its incredible run since March’s release and still raking a 95% profit. Platform exploits and instagram hacks had plenty to contribute, not to mention Elon Musk mocking BAYC through his previous Twitter profile picture showing a collage of Bored Ape NFTs - which many viewed as a way to mock the community.
Terra (LUNA) is also facing a surprising downturn back to its $60-65 level from the previous market correction, down 19% this week. Besides Bitcoin’s inevitable contribution, lower demand for algorithmic stablecoin UST under reduced APY earnings contributed to Terra’s asset depreciation - now 46% under the previous all-time high.
Global crypto market cap, now over 40% lower than its ATH of nearly 3 trillion dollars. Source: CoinMarketCap
On the other hand, Algorand (ALGO) and Tron (TRX) made impressive recoveries over the past week, both raking in respectively 34 and 31% in weekly appreciation. Algorand was announced last week as a new partner of the global football association FIFA, while TRON launched its own algorithmic stablecoin USDD.
Overall though, things are not looking bright for altcoins. As a rule of thumb for altcoins whenever Bitcoin tanks, their recovery is consistently much slower than BTC’s. If venturing into altcoins during this current market instability, it is wise to stick to the most consolidated projects when filling the bags - smaller projects are not in a good spot, and may drop even further than usual with longer recovery times.
Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
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