On Friday, the three major U.S. stock indexes hit three-week highs, 10-year U.S. bond yields approached a one-month low, crude oil hit two-month highs, and gold rose for two consecutive weeks... At a time when almost all assets rose sharply , Bitcoin was indifferent and unswervingly fell.
Bitcoin, the world's largest cryptocurrency, has fallen for eight straight weeks, the first time since August 2011. During this time, Bitcoin has lost more than a third of its market capitalization. As of Friday, Bitcoin had fallen by 2.13% within the day, falling below $29,000 per piece again.
Amid the recent wave of selling, bitcoin has fallen nearly 60% from its all-time high of $69,000 in November and has been hovering between $280-300 million in recent weeks.
Bitcoin's status as the number one cryptocurrency has been cemented as the world's third-largest stablecoin, TerraUSD, collapsed. Bitcoin’s share of cryptocurrency market capitalization rose to 44%, the highest level since October, according to CoinGecko.
However, the cryptocurrency market at this time is different. According to CoinMarketCap data, the global cryptocurrency market value is about 1.2 trillion US dollars, which has evaporated by 58% compared with the historical high of more than 2.9 trillion US dollars in November last year.
In addition to bitcoin, popular tokens in DeFi (decentralized finance) projects also fell sharply on Friday, with the second-largest cryptocurrency ether and Avalanche down more than 4% and Solana down 5.7%. Even in the NFT (Non-Fungible Token) market, the hugely popular Boring Apes and Cypherpunks are under downward pressure.
Panic is the main factor behind the ongoing decline in cryptocurrencies. As investors ramped up bearish bets, bearish sentiment on the first U.S. bitcoin futures ETF was near its highest level since the fund’s inception in October 2021.
Matt Maley, chief market strategist at quantitative hedge fund Miller Tabak, said in an interview with the media that the market downturn "has greatly reduced investor confidence in cryptocurrencies." “So, as investors become more confident in the overall market, they are looking for other assets to buy on weakness. They don’t want to repeat the same mistakes in cryptocurrencies.”
Additionally, Bitcoin may have room to fall as the Fed continues to tighten its policy.
Guggenheim chief investment officer Scott Minerd said on Monday that he expects bitcoin to fall further, with $8,000 or the ultimate bottom. In other words, Bitcoin will continue to fall by more than 70% on the basis of the current $28,800.
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