According to the digital asset tracking website CoinMarketCap, Bitcoin's price oscillated between $26,934 and $25,445 yesterday.
Bearish sentiments ruled the digital asset market on Monday, with Bitcoin nosediving by 5.84%, touching mid-March 2023 lows and closing the trading session at $25,609. This pessimism also affected other top-10 cryptocurrencies by market cap, most of which saw a decline in their prices.
The main driver behind this sharp downturn was fresh news of troubles facing the leading crypto exchange, Binance. The US Securities and Exchange Commission (SEC) recently charged the company with 13 offenses, including unlawful operations in the US and securities law violations.
Moreover, the SEC classified several cryptocurrencies as unregistered securities, including BNB, BUSD, Solana, Polygon, and others.
Adding to Monday's pressure on leading digital coins was pessimism observed in the US stock markets. The Dow Jones Industrial Average index fell by 0.6%, the S&P 500 index dropped by 0.2%, and the NASDAQ Composite index shed by 0.1% during yesterday's trading session.
However, economists highlight a decrease in correlation between the cryptocurrency and stock markets this year amid Bitcoin's current sideways price movement.
Analysts from the American investment company Bernstein reported in late February that the correlation between Bitcoin and the NASDAQ Composite Index had fallen to 0.58 from 0.94.
Bernstein's experts suggest that the crypto market is currently teetering between bull and bear trends, awaiting further catalysts. Its susceptibility to significant news and events in the financial world has significantly decreased.
In early 2022, analysts often emphasized the high correlation between the US stock market and the crypto market due to the anticipation of the geopolitical conflict in Eastern Europe and further steps by the US Federal Reserve. In mid-2021, experts from investment company Arcane Research stated that the correlation between Bitcoin and tech stocks had reached its highest since July 2020.
Economists from the analytics platform TradingView noted that the correlation between the crypto market and the US stock market in the fourth quarter of 2022 was 70%.
Last week, a crucial factor that bolstered the cryptocurrency market was news from the United States concerning the debt ceiling. The US Senate recently approved a budget bill to raise the debt limit, a move that had already received the House of Representatives nod. The proposal now awaits President Joe Biden's signature. Experts suggest that this significantly reduces the likelihood of default and eases global market uncertainties, positively influencing traders' risk appetite.
Altcoin market
In the altcoin market, Bitcoin's primary competitor Ethereum also kicked off Tuesday with sideways movement, trading at $1,811 at the time of writing the article. The altcoin fell by 5.01% on Monday, closing the session at $1,807. Regarding future ETH price forecasts, analysts suggest that the altcoin's trend will depend on whether it plunges below $1,600 or climbs above $1,950.
Among the top ten cryptocurrencies by market cap, BNB was the worst in the last 24 hours, with a drop of 8.49%. Over the same period, all coins in the top ten exhibited a negative trend.
During the past week, BNB also became the top loser among the top ten cryptocurrencies, recording a decline of 11.78%. In contrast, XRP topped the gainers' list with a modest 2% rise.
CoinGecko, the world's largest digital assets data aggregator, reports that Kava posted the best 24-hour performance among the top 100 most capitalized digital assets, with a 10.43% rise. On the other hand, Terra Classic recorded the most significant dip of 8.04%.
Among the top 100 strongest cryptocurrencies, Terra Classic had the best performance over the past week, with a gain of 5.21%, while Pepe suffered the worst hit, dropping by 29.15%.
According to CoinGecko, as of Tuesday morning, the total cryptocurrency market capitalization stood above the crucial $1 trillion mark, at $1.057 trillion, which represents a 0.07% dip in the past 24 hours. Since reaching its peak above $3 trillion in 2021, the crypto market cap has shed nearly $2 trillion.
Forecasts from crypto experts
June is traditionally seen as a favorable month for Bitcoin. Over the past 12 years, the digital asset ended this month with gains seven times and losses five times. The average June increase is around 16.7%, and the average decrease is 19.2%. If Bitcoin follows the trend of previous years this June, it might surge to $31,600 above April's highs, or plummet to $21,900.
Regarding short-term forecasts for Bitcoin, most analysts are leaning towards a positive scenario, suggesting that the coin will remain resilient.
Crypto experts claim that the BTC price will range from $27,000 to $28,500. Specialists are confident that Bitcoin has a chance to overcome the bearish trend, but the cryptocurrency needs strong catalysts, which are currently absent in the markets.
YouTube analyst Jason Pizzino is even more optimistic. He asserts that even unfavorable events in the market cannot stop the BTC rally, and soon the coin test the range of $32,000 to $42,000.
This view is shared by Arthur Hayes, the founder of the cryptocurrency exchange BitMEX, who is certain that regardless of the financial path taken by the Federal Reserve and the US authorities, BTC will rise to new price highs. According to Hayes, this will happen both in conditions of high inflation and increased key interest rates, as well as in the case of decreasing inflation and lower interest rates.
In May, Bitcoin declined by 7.6% and closed the month at $27,100. In April, BTC lost nearly 10%. At the end of March, the coin's value soared by 22.6%, posting the third consecutive month of increase amid the normalization of the banking crisis situation.
In February, the leading cryptocurrency ended with a 0.9% increase, reaching $23,200, and in the first month of 2023, it gained almost 40%, making January its best month since October 2021. Furthermore, January to March of the current year proved to be the best quarter for the coin since the beginning of 2021, with BTC being one of the most profitable assets.
The key reason for the growth of the digital currency market since the beginning of 2023 has been the impending crisis in the traditional financial market. Securities and bonds are currently going through a challenging period. That's why we are witnessing a continuously growing desire of investors to invest in virtual currencies.
