Bitcoin (BTC) and Ethereum (ETH) continue to maintain an extremely high correlation with stock markets
According to recent data shared by Intheblock Analytics, Bitcoin (BTC) and Ethereum (ETH) continue to maintain an extremely high correlation with the stock markets, with the 30-day correlation reaching 0.9.
The thorny conclusion for Bitcoin bulls is that recent crypto market declines cannot be dissociated from the downturn in traditional markets. On Thursday, stock futures were under pressure again, with the S&P500 on the verge of a bear market. Fears that the Federal Reserve’s rate hikes to combat rapid inflation might send the economy into a recession resulted in investors selling stocks.
For the second day in a row, Bitcoin stayed close to $29,000, which brought minor losses to the rest of the crypto market. Ethereum has lost 3.67% in the past 24 hours, although it is still trading close to $2,000. The top 10 cryptocurrencies, excluding stablecoins, are all losing ground, with losses ranging from 0.36% (BNB) to 5.77% (Solana).
According to CoinMarketCap, the total crypto market capitalization fell 2.37% to $1.25 trillion. The dominance index for Bitcoin increased marginally to 44.8%. On Thursday, the Crypto Fear and Greed Index rose a few points to 13 and remained in “extreme fear.”
Stock market correlation
After the Federal Reserve raised interest rates by 50 basis points, or 0.5 percentage points, at its last Federal Open Market Committee (FOMC) meeting in May, stocks could be on the verge of a a bear market.
Meanwhile, cryptoanalyst Ali Martinez sees that further weakness in ETH might lead to a drop to $700 as the “transaction history shows that 2.24 million addresses bought 26.33 million ETH at $2,300.” Any signs of weakness might encourage these addresses to sell, which could see Ethereum drop to its most important support at $700, where 13.25 million addresses hold 13.1 million ETH.”
Despite the potential for lower prices, Bitcoin and Ethereum are attracting a lot of attention. Earlier this week, Salvadoran President Nayib Bukele announced on Twitter a meeting of 32 central banks and 12 financial authorities from 44 countries held on May 16 to discuss financial inclusion and the deployment of Bitcoin in El Salvador. .
