Bitcoin close to $ 30K while investors search for a bottom
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Bitcoin (BTC) fell to $ 29,200 before a sharp turnaround that brought the price closer to $ 30,000 later on trading day in New York. The cryptocurrency has traded in a choppy price range, and so far the upside has been limited as some buyers remain on the sidelines.
Meanwhile, alternative cryptocurrencies (altcoins) were mixed on Tuesday. Chainlinks LINK token rose by as much as 11% over the last 24 hours, compared to BTC’s flat performance over the same period. Internet Computer’s ICP token fell 6% on Tuesday, and Solana’s SOL token fell 4%.
Sentiment among crypto traders remains bearish, although some analysts and fund managers are beginning to look for a price drop in hopes of recovering from large losses realized over the past month.
“For every cycle we go through in digital assets, it’s time to accumulate under the bear markets, and these gains are rewarded exponentially when the bull cycle resumes,” wrote Two Prime, an investment firm for digital assets, in an email. The company expects the portfolio to recover after a decline if BTC returns above $ 33,000 and ether (ETH) above $ 2200, respectively approximately 10% and 20% above the current price level.
Two Prime’s Digital Asset Fund, which also uses derivatives for income and hedging purposes, is expected to provide a negative return of 31.4% for May, which largely followed the underperformance of ETH and other altcoins such as SOL. In general, altcoins fall more than BTC during downturns due to their larger risk profile.
Latest prices
●Bitcoin (BTC): $ 31,163, ,60.62%
●Ether (ETH): $ 1853, 400.40%
●S&P 500 daily closing: 4 161, +0.97%
●Gold: $ 1856 per troy ounce, +0.89%
●Ten-year government return daily close: 2.97%
Bitcoin, ether and gold prices are taken around 4 pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the spot price for COMEX. Information on CoinDesk indexes can be found at coindesk.com/indices.
Identify a cycle bottom
Most indicators suggest that bitcoin is approaching the middle or end of a bear market. For example, the realized price model, which is an estimate of the average cost basis for all BTCs in supply, is $ 23,600. Some analysts see it as an important level of support, which may indicate a low price.
“Historically, the total market cost base or realized price has been a very good cycle support level, with 84.9% of bitcoin trading days closing above this level. In other words, only 15.1% of trading days have closed below the realized price.” Glassnode, a crypto data company, wrote in a blog post.
To confirm a low level, BTC must return above the realized price level, similar to what happened at the end of previous bear markets. This indicates that market participants have not fully capitulated yet.
“The Bitcoin bear market is not over yet, although it has taken a significant part of the way down. The market is full of rumors that short-term buyers have already capitulated,” wrote Alex Kuptsikevich, analyst at FxPro, in an email to CoinDesk .
Rather, a beef market begins when medium-term investors and even some long-term investors capitulate, which could attract buyers at lower prices, according to Kuptsikevich. BTC is “unlikely to reach this point before the price returns to its peaks in 2017 (around $ 19,800),” he wrote.
Altcoin roundup
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Morgan Stanley sees cryptocurrency tightening: Weakness in crypto markets, failure in UST stablecoin and a reduction in influence in decentralized finance (DeFi) result in “the crypto equivalent of quantitative easing,” Morgan Stanley (MS) said in a report. However, “systemic spillover” risk from the crypto markets to the fiat banking system appears to be limited, the bank said, because the leveraged crypto companies usually borrow from each other. read more here.
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Circle supports Polygon USDC: Circle, the issuer of the second largest stablecoin USDC, adds support for Polygon USDC on its payment and treasury platform. The move marks the first time a bridged version of stablecoin has been supported on the platform, and will help Circle-based developers automate flows from fiat to Polygon USDC and let them switch fiat for native USDC across different blockchain networks. The USDC has around $ 54 billion in circulation, and achieves more than $ 5 billion in market value in the stablecoin shake after UST’s collapse. read more here.
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Binance.US ‘efforts: Binance, the US arm of the world’s largest cryptocurrency exchange, launched a blockchain investment product that promises high returns on invested crypto, with the aim of circumventing similar offers from rival US-based exchanges. Staking – a popular DeFi service where users lock assets to support proof-of-stake (PoS) networks – allows users to earn up to 18% annual return on certain tokens. The first tokens available for action are audius (AUDIO), avalanche (AVAX), BNB chain, cosmos (ATOM), livepeer (LPT), solana (SOL) and graphene (GRT). read more here.
Relevant insight
Other markets
Most digital assets in CoinDesk 20 ended the day lower.
Biggest winners
Biggest losers
Sector classifications are given via Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive and standardized digital asset classification system. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.
