The quotations of the first cryptocurrency fell below $30,000 momentarily, setting a new local low since early 2022.
According to CoinMarketCap, Bitcoin continued to fall on Monday, May 10 — BTC decreased to $29,961. On some platforms, Bitcoin was trading at around $29,700. As of 13:30 (GMT+3), the first cryptocurrency has slightly strengthened and is now near $31,800, showing extremely high volatility. During the last 24 hours, the fluctuation range was almost $1,900.
Following Bitcoin, the crypto market fluctuates as well. Its total capitalization is about $1,427 billion, and it was even lower at times — around $1,353 billion. Coinglass reports that the overall volume of liquidated positions is approximately $500 million over the past 24 hours, and it liquidated almost $1 billion worth of positions during the previous day.
Dmitry Kudinov, EMCD’s Operations Manager, commented on the situation for CoinsPaid Media:
“There are two main reasons for Bitcoin’s decline below $30,000:
- BTC’s high correlation with the S&P 500 and NASDAQ 100 indexes. In recent months, Bitcoin practically repeats the dynamics of these indexes. After another key rate hike in the US, which occurred on May 5, stock indexes are rapidly declining. Bitcoin is doing the same.
- Manipulations by the Luna Foundation Guard, a non-profit organization that was created to ensure the stability of the algorithmic stablecoin TerraUSD (UST). On May 9, the stablecoin lost its peg to the US dollar, and the LFG began to sell BTC en masse to return UST its stability. The organization itself provides such a mechanism. It is already known that more than $1.5 billion in BTC was poured into the market in a very short period of time, which strongly influenced the exchange rate.
Given the peculiarities of the last crypto market collapse, we can assume that Bitcoin will recover in the short term, as there are no further prerequisites for a decline. In 2021, Bitcoin didn’t drop below $28,000. This level can now be considered a marker. If the rate of BTC stays above this level in the nearest weeks and months, it will be possible to talk about the growth up to $50,000 and further increase. If $28,000 is broken through downwards, we will see a long bearish trend, or as it is also called “crypto winter.”
CoinsPaid trader Vincent Pellizzari also shared his opinion on the current situation in the crypto market with our editorial team:
“Just like traditional financial markets, the crypto market is really gloomy this year. Since January 1, BTC lost more than 30% of its value. The main reason behind this fall is to be found in the shift of the monetary policy stance of some major Central Banks over the globe. Indeed, in an attempt to tame inflation growth, Central Banks such as the Fed, the BoE and also the ECB decided to raise their interest rates. This monetary policy is known to impact risk assets negatively. Despite all the comments labeling BTC as a safe haven asset, market participants see it as nothing less than a risk asset, hence the strong sell-off observed across the board.
Markets are cyclical, boom and bust cycles are observed through the years. These cycles seem to apply to the crypto market, here they are just amplified because it is a young market that is more sensitive to sentiment-driven trading. The short-term perspective for BTC, in my opinion, is still negative. The $30,000 level is under attack again, it has been protected many times since last year. It is the last support before the sudden drop to $20,000. In such a market context, cash is king, so I think we should wait for a new boom cycle and get ready to hunt for new opportunities.”
