Bitcoin traded below the $30,000 mark, while Ethereum and Dogecoin were also weaker over the last 24 hours at press time on Monday evening, as the global cryptocurrency market cap declined 4.4% to $1.3 trillion.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
|PAX Gold (PAXG)||+0.9%||$1,826.98|
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Why It Matters: Cryptocurrencies continue to mirror stocks closely. At press time, the S&P 500 and Nasdaq futures were relatively flat after stocks ended Monday in the red.
The dollar index was 0.08% lower at $104.1 at press time. The measure of the greenback’s strength against six of its peers has slipped from the $105 levels touched on Friday.
On the current state of the dollar index, cryptocurrency trader Michaël van de Poppe said the “highs have been swept for liquidity.”
The analyst tweeted that if the index lost 103.7 points, more downwards pressure could be seen and lead to risk-on assets getting a boost.
If I look at the current state of the $DXY, I think we’ll follow through with this scenario.
Assuming we’ll be seeing some corrective move, the highs have been swept for liquidity.
Losing 103.7 points and I think we’ll get more downwards pressure here -> risk-on assets up. pic.twitter.com/mRc5SW1nMk
— Michaël van de Poppe (@CryptoMichNL) May 16, 2022
OANDA senior market analyst Edward Moya said that the retail and institutional world “still have massive wounds” from the recent collapse of Bitcoin prices.
“Confidence is weak in the cryptoverse and until stablecoin concerns ease, Bitcoin is in the fight for its life,” said Moya, in a note, seen by Benzinga.
Terra (LUNA) co-creator Do Kwon on Twitter proposed forking the Terra chain into a new chain without algorithmic stablecoins called Terra, with the ticker LUNA, and Terra Classic with the ticker LUNC.
If Kwon’s proposal passes, the fork will be coordinated with the validators on May 27.
6/ The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called “Terra” (token Luna – $LUNA), and the old chain be called “Terra Classic” (token Luna Classic – $LUNC). Both chains will coexist.
— Do Kwon (@stablekwon) May 16, 2022
Terra USD (UST), an algorithmic stablecoin backed by LUNA, lost its peg to the dollar last week, precipitating the crash in cryptocurrencies. Since then, LUNA has collapsed in value entirely after witnessing massive hyperinflation.
Delphi Digital said that Bitcoin’s latest movement below the $30,000 mark puts its price nearly 60% off its all-time high. However, a big drawdown doesn’t mean “immediate reversal” is imminent.
BTC-USD Returns After Previous > 55% Drawdowns From ATHs — Courtesy Delphi Digital
“Looking back at historical instances where BTC’s price dropped more than 55% after putting in a new ATH, its average price performance over the following six months was relatively muted at best,” said the independent research firm in a note.
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