Short-term tendencies on the crypto market may seem bullish, but the long-term perspective seems shady according to some experts
After a rough week in the cryptocurrency market, Bitcoin dipped below $39,000, indicating traders are actively exiting the industry or shelving funds amid rising risk trends, like Santiment noticed.
According to on-chain metrics trackers and providers, compared to the bearish trading sessions for Bitcoin lately, the trading volume on the rebound day has increased significantly, especially compared to the weekend trading sessions, which are usually followed by extremely low trading volume.
For now, Bitcoin, Luna and other cryptocurrencies have reached or exceeded Thursday’s low prices. In the long term, Bitcoin still remains in a downtrend, indicating that there is no overall shift in sentiment among traders and investors.
Can Bitcoin drop further?
Following the aggravation of the beartrend on the cryptocurrency market, various analysts expressed their concerns regarding the stability of Bitcoin as it was extremely close to breaking a strong support line formed in February.
The movement in tech stocks and other risky assets also goes against the first cryptocurrency. As noted by Blockware analyst Will Clemente, Bitcoin is still highly correlated with most tech stock companies, showing that the asset will most likely follow their performance in the market.
As the FED announced the rate hike, both financial and cryptocurrency traders started moving their funds away from risky assets, leaving them in fiat currencies or safer investment options like bonds.
With the rise of risk aversion tendencies in the market, digital assets could actually lose some of their capitalization, especially with the tightening of monetary policy in the United States.
At press time, Bitcoin trades at $40,804 after losing 14% since the local high reached at the beginning of April.
