Why Do Cryptocurrencies Keep Falling?

In the end, April was not a bullish period for cryptocurrencies. It was initially believed that the slight rebound at the end of March would instil an upward trend for the second quarter. Unfortunately, the crypto market gropes between finding a support to relaunch or defending one so as not to experience the worst. In summary, cryptocurrencies are in full consolidation. And, it is not the fall of this April 29 which will contradict us.

Cryptocurrencies too dependent on stock market movements

We recalled in one of our articles this correlation of Bitcoin with the Nasdaq technology index over different time horizons. One observation seems to be implacable; the correlation between asset classes had not been so high since November 2021. That said, if the Nasdaq falls, there is a high probability that BTC will in turn fall along with the rest of the cryptocurrency market.

This week, digital assets suffered from this destructive correlation. As with Friday, the Nasdaq closed the day sharply lower. The tech index fell 4.17% to 12,334.64 points. An underperformance which was reflected under the S&P 500, the price of which fell by 3.63% to 4131.93 points. The Dow Jones index did not emerge unscathed, having also ended the day with a decrease of 2.77%.

Cryptocurrencies were going to suffer. At the global level, the market capitalization lost 3.37%. Bitcoin lost 2.74% of its value. The same goes for Ethereum, which shows a drop of 3.88% over the last 24. Even a project like ApeCoin, which had risen in value by 90% during the week, is currently on the decline. Apecoin, the cryptocurrency of the BAYC collection, recorded a loss of 18.75% over the last 24 hours.

What to expect for the very short term?

We know this famous adage on the stock market: β€œSell ​​in May and Go away” [Vendez en mai et partez]. Based on the historical performance of risky assets, May is not often the most bullish month. For cryptocurrencies, memories of the May crash after Chinese bans and Tesla’s reversal of BTC payments are already haunting investors. Suddenly, we wonder if we are safe from a sell-off for this month of May, given the jagged performance of digital assets during this year.

There are many reasons to doubt the occurrence of this event. First, there is the FED, which plans to increase its long-term rates by 50 basis points. Then, the conflict in Ukraine is still far from being resolved. Ultimately, bitcoin’s worst enemy on the stock market, the dollar index, the DXY has never been so high in 20 years. Currently, its price stands at 103.21.

However, as one of our analysts for Be[In]As Crypto pointed out in their post, a lot of on-chain Bitcoin indicators are very bullish right now.

So what are the chances of seeing a sell-off during the month of May? Let us know your thoughts on our Telegram channel!


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