Bitcoin, Ethereum, and other major coins rose late Thursday as fears of a bear market in equities and a weaker dollar increased the appeal of the apex coin. The global cryptocurrency market capitalization increased by 4.8% to $1.3 trillion.
|Piece of money||24 hours||7 days||Price|
|Cryptocurrency||% change over 24 hours (+/-)||Price|
|Kyber Crystal Network V2 (KNC)||+21.2%||$2.66|
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What happened: The S&P 500 has fallen nearly 19% below its all-time high reached earlier in 2022; the index is now hovering near bear market territory. A 20% drop below all-time highs is interpreted as a bear market by many experts.
S&P 500 and Nasdaq futures were trading up 0.4% and 0.7% respectively at press time.
The dollar index, a measure of the greenback’s strength against six other currencies, fell 0.05% to 103.74, while US 10-year yields fell to 2.772, the lowest since in late April, according to a Reuters report.
Senior Market Analyst OANDA Edouard Moya noted the dollar’s “free fall” as investors buy Treasuries amid fears the economy is heading for “difficult times.”
“A weaker dollar and bear market fears are making Bitcoin attractive again,” Moya said in a note, seen by Benzinga.
“It looks like the fallout from all the stablecoin dramas that have taken cryptos down is finally fading. Bitcoin looks set to consolidate here, but bulls should be happy to see that prices aren’t mimicking what’s happening with the stock market.
Pointing to Bitcoins relative strength indexRekt Capital tweeted on Thursday that the indicator is entering a “period that historically preceded outsized returns for long-term investors.”
The cryptocurrency trader said previous reversals from this level were seen in January 2015, December 2018, and March 2020.
#BTC RSI is now entering a period that has historically preceded outsized returns for long-term investors
Previous reversals of this area include January 2015, December 2018, and March 2020
—Rekt Capital (@rektcapital) May 19, 2022
Michael van de Poppe tweeted that due to the recent “heavy crash” there is a 20%-25% chance of relief in the market. The analyst estimated Bitcoin between $34,000 and $36,000.
The total market capitalization of #crypto swept lows to $1.1T and looks poised for relief on the upside.
Due to the heavy crash, there seems to be a 20-25% chance of relief across the whole market here.
— Michael van de Poppe (@CryptoMichNL) May 19, 2022
The futures market has another story to tell. Bitcoin’s put/call ratio hit a 12-month high with open interest hitting a 12-month high of 0.72 this week. This is a bearish indicator, according to Delphi Digital.
BTC Put/Call Ratio on Open Interest and Volume – Courtesy of Delphi Digital
The on-chain analytics firm said the put/call ratio hit 0.96 before Bitcoin’s price fell more than 50% in May 2021.
The put/call is a measure of the amount of purchases of puts compared to calls. A high ratio means investors are speculating that Bitcoin will continue to sell off or whether investors can hedge their portfolios against a downturn.
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