Cryptocurrency markets hold support exceptionally well this Friday as Bitcoin hovers at the $30k level and Ethereum manages to keep the $2k support line. Last night, Bitcoin rallied from $28k to a high of $30.1k as the global and US market sentiment is starting to stabilize. Many wonder whether the LUNA and UST debacle added additional uncertainty to BTC and ETH’s prices as traders saw the potential downside of cryptocurrencies and, more specifically, algorithmic stablecoins. Let’s look at the markets and see what the future holds for Bitcoin and whether the price could show a significant rally as early as next week.
After the significant crash over the past month, where cryptocurrency markets overall lost over $500 billion in valuation, dropping from $1.8 billion in April to a low of $1.1 billion in May, the global cryptocurrency market capitalization has been hovering at the $1.2 billion level for the past week, signaling that the markets are starting to stabilize.
Source: CoinMarketCap
Looking at the stock markets, many users want out of the markets as inflation and economic uncertainty loom on the horizon. There has been a record outflow of over $90 billion this week, the highest it has ever been. This has been the steepest correction magnitudes higher than the covid crash and the dot com bubble.
Source: sentimentrader.com
The above chart shows the significant amount of money and fear currently on the markets, causing an unprecedented number of traders to take money out of the markets and transfer their holding into their bank accounts.
Despite the massive outflow of funds out of the stock markets, Bitcoin is doing just fine, given that it manages to hold above the $30k level with relatively low volatility this past week.
It seems that Bitcoin is finally starting to decouple from the stock market, which will provide it with breathing room to build momentum for its next rally.
According to a report from MarketWatch, an analyst who called the 2020 market bottom is predicting a massive rally for the S&P 500. The founder of DeMark Analytics, Tom DeMark, claims that his indicators show that the S&P 500 will see another sell-off before a “shocking rally” will lift the index above 4,400.
Since Bitcoin is still trading in relation to the stock markets, if the S&P 500 shows significant bullish momentum, chances are the cryptocurrency markets will also experience substantial growth.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency.
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