According to CoinMarketCap, Bitcoin's price fluctuated between a high of $26,124 and a low of $25,675 yesterday.
However, the crypto market was dominated by bearish sentiment. The price of Bitcoin dropped by 0.65% on Monday, closing at $25,792. The gloom surrounding the king of cryptocurrencies was shared by many other top-10 cryptocurrencies by market cap, which saw significant decreases in price.
Last week was particularly bad for the flagship cryptocurrency. Bitcoin dropped by 5.84% on Monday, plunging to mid-March 2023 lows and closing the trading session at $25,609. The trigger for this sharp fall was news about largest crypto exchange Binance. The US Securities and Exchange Commission (SEC) had levied 13 charges against the company, including illegal activities within US and violations of securities laws.
Meanwhile, Bitcoin declined by 4.1% over the past week. On Saturday, the coin abruptly fell below the key level of $26,000.
One key driver of cryptocurrency market growth on Tuesday was optimism in the US stock markets. Yesterday, the Dow Jones Industrial Average rose by 0.56%, reaching a monthly high, while the S&P 500 and NASDAQ Composite increased by 0.93% and 1.53% respectively.
Interestingly, economists have noted a decrease in the correlation between cryptocurrency and stock markets this year, against the backdrop of Bitcoin's flat price movement. Bernstein, an American investment company, reported this at the end of February. The correlation between Bitcoin and the NASDAQ Composite index had plummeted from 0.94 to 0.58 within the past month.
According to Bernstein's experts, the crypto market is currently teetering between bull and bear trends, awaiting further catalysts. Its susceptibility to major news and events in the financial world has significantly decreased.
At the start of 2022, analysts often emphasized the high level of correlation between the US stock market and the digital asset market. This was due to tense anticipation of the geopolitical conflict in Eastern Europe and upcoming actions by the US Federal Reserve. Last year, investment firm Arcane Research stated that the correlation between Bitcoin and tech stocks had reached a peak since July 2020.
Meanwhile, economists from the analytical platform TradingView stated that the correlation between the cryptocurrency and US stock markets was 70% in the fourth quarter of 2022.
Altcoin market
Ethereum, Bitcoin's primary rival, kicked off Tuesday on a rising trend. At the time of writing the article, the altcoin is trading at $1,751. Following Monday's close at $1,733, a drop of 1.34%, Ethereum's future trend is subject to speculation. Analysts suggest that the direction will hinge on whether it falls below $1,600 or surges above $1,950.
Meanwhile, among the top 10 cryptocurrencies by market capitalization, Cardano gained 4.42% and became the best performer over the past day. The past 24 hours saw all coins in the top 10, except for a few stablecoins, showcasing a positive trend.
Over the past week, Solana topped the list of declining cryptos from the top ten, with a slump of 22.75%. In contrast, XRP led the gainers, adding 3.32%.
According to data aggregator CoinGecko, Sui token bagged the top spot among the top 100 most capitalized digital assets, with a hike of 19.17%, while Rocket Pool slumped the most, recording a 4.69% dip.
Last week's best and worst performers from the top 100 cryptos were XRP (+3.32%) and Chiliz (-27.52%), respectively. As of Tuesday morning, CoinGecko's data reveals the total crypto market capitalization stood over $1 trillion at $1.03 trillion, a 0.7% rise over the previous day.
Since reaching its peak of over $3 trillion in 2021, the crypto market has lost almost $2 trillion.
Crypto experts' forecasts
Historically, June is considered a favorable month for Bitcoin. Over the past 12 years, the leading cryptocurrency has ended the month with gains seven times and dipped five times. The average increase for June stands at around 16.7%, and the drop at 19.2%. If Bitcoin follows this pattern this June, it may rise to $31,600, surpassing April's highs, or slump to $21,900.
As for short-term Bitcoin forecasts, most analysts anticipate a positive scenario and highlight Bitcoin's resilience. They suggest that in the short-term, BTC might trade within a range of $27,000 to $28,500. They believe Bitcoin has a fair chance to break out from the bearish trend. However, it would require strong catalysts, which seem to be lacking in the current markets.
YouTube analyst Jason Pizzino harbors an even more optimistic outlook. He argues that even the adverse market events will not hinder the Bitcoin rally and soon the coin will land in the range of $32,000–$42,000.
This view is shared by BitMEX's founder, Arthur Hayes, who believes that irrespective of the financial direction taken by the Federal Reserve and US authorities, Bitcoin will scale new price heights. Hayes predicts this will occur even in high-inflation scenarios and hikes in key interest rates, or in the face of decreased inflation and lowered interest rates.
Recall that in May, Bitcoin took a 7.6% dip, ending the month at $27,100. In April, BTC lost nearly 10%. However, Bitcoin's value shot up by 22.6% in March, marking the third consecutive monthly increase amid the easing of the banking crisis.
February saw Bitcoin's close with a 0.9% increase to $23,200, and during the first month of 2023, its value soared nearly 40%. This performance made January its best month since October 2021. Interestingly, January to March this year turned out to be Bitcoin's best quarter since the start of 2021, making BTC one of the most profitable assets.
The key reason behind the rise in the digital currency market since the beginning of 2023 has been the looming crisis in the traditional financial market. Presently, securities and bonds are experiencing quite a challenging period, leading to a steadily growing interest among global investors to pour money into virtual currencies.
