- The global crypto market cap is back above the $1.3trillion mark.
- BTC’s price has tested the $30,300 resistance.
- Both bullish and bearish news is driving market volatility higher.
The larger cryptocurrency market has been rangebound for most of this month, as the global crypto market cap oscillated between the $1.2 trillion low and $1.34 trillion.
It has been an eventful 24 hours for the crypto market, with BTC jumping back above the $30,000 mark and several altcoins in the top 100 making gains. Sustained gains, however, still remain in question as the market continues to be volatile.
BTC risks falling to $20,000
According to some market experts, BTC’s chances of revisiting the lower levels are still high. The Luna Foundation Guard (LFG) recently revealed that it had sold almost all of its BTC reserves during last week’s Terra (LUNA) and TerraUSD meltdown. The higher amount of circulation BTC in the market added to price volatility.
Famous trader Phoenix said in a recent Twitter post that if bitcoin’s price falls below the $29,494 mark, the next price range to watch would be $21,800-23,800.
Coming days going to be very important imo. Keep these levels, grind higher from here.
If it fails, my eyes are on $21.8-23.8K. Didn't expect to keep those in mind again, lol. I was wrong thinking Q1 structure was a trend reversal start. pic.twitter.com/q2qTGAhwuX
— Phoenix (@Phoenix_Ash3s) May 16, 2022
As highlighted in an FXEmpire article earlier this morning, the Bitcoin Fear & Greed Index fell from 10/100 to 8/100, its lowest level since March 14, 2020.
The early-week BTC losses witnessed this week could be blamed on global investors in the equity markets and the crypto market responding to dire economic data from China.
Despite short-term price gains, weak technical signals and low buying pressure left bitcoin’s price in a rangebound movement. That said, in the traditional market, weak stats coupled with the threat of a recession left the NASDAQ 100 down 1.20%.
Even though Federal Reserve chair Jerome Powell’s assurances on the rate hike front have delivered support, the same has failed to change the larger economic outlook. Furthermore, the correlation between bitcoin and the NASDAQ strengthened marginally on Monday.
On a one-day chart, BTC’s price made some positive progress; however, high gains didn’t seem to be on bitcoin’s cards as RSI highlighted high selling pressure in the market.
Analyst Rekt Capital pointed out that the $20,000 zone is an area of interest should current levels fail to hold and buyers not materialize.
#BTC Monthly Timeframe
Price is at ~$28800 support
In 2021, $BTC formed long downside wicks against this support, indicating strong buy-side interest here
— Rekt Capital (@rektcapital) May 16, 2022
LUNA and UST Debacle Continues
The South Korean Conservative Party has requested a parliamentary hearing on the dramatic fall of Terra’s LUNA and its algorithmic stablecoin UST.
Korea's conservative party requested to have a hearing about the Terra incident. The politician noted Korean exchanges each reacted differently to the crash. He wanted to invite both Do and the exchanges to learn more details. https://t.co/3ezNlTFzzP
— Doo | StableNode @Permisionless (@DooWanNam) May 17, 2022
On Tuesday, the South Korean National Assembly’s Political Affairs Committee summoned Terraform Labs co-founder Do Kwon for a parliamentary hearing regarding the issue. The committee’s representative, People’s Power’s Yoon Chang-Hyeon, said,
“There is a part that raises questions about the behavior of exchanges during the crash. Coinone, Korbit, and Gopax stopped trading on May 10, Bithumb on May 11 stopped trading daily, but Upbit did not stop trading until May 13.”
However, amid the negative commentary, TerraUSD’s price managed to register 11.83% gains trading at $0.1216 at the time of writing.
High Volatility Sends Altcoin Prices Up
A recent Santiment report highlighted that for those ‘expecting less volatility for crypto markets in the first weeks of May after the rocky first four months of 2022, a continued pattern of downswings shook even crypto’s optimistic traders to their cores.’
After the second FOMC meeting that resulted in the US Fed increasing interest rates by another 0.5%, crypto markets showed some life for 24 hours. At press time, some of the top gainers were altcoins like Elrond (EGLD), Kava (KAVA), Aave (AAVE), and Kadena (KDA).
Interestingly, Litecoin’s price saw a bounce of over 6% in the last 24-hours as it traded at $70.83.
One of the most interesting news came from China, as bitcoin mining was back in the news this week, with new data showing China as the second-largest bitcoin mining nation, despite an outright ban.
A recent, FXEmpire article also highlighted that the world’s largest digital currency asset manager, Grayscale, confirmed that it would be bringing its first European ETF called the Grayscale Future of Finance UCITS ETF (GFOF).
Thus, with both bullish and bearish developments taking place in the crypto market, volatility could continue to push BTC and the global crypto market’s boat in the near term.