Altcoins stage a relief rally while Bitcoin traders decide whether to buy the dip


The similarity in worth motion between the crypto and conventional monetary markets stays fairly sturdy on Might 10 as merchants loved a reduction bounce throughout asset lessons following the Might 9 rout, which noticed Bitcoin (BTC) briefly dip to $29,730.

Market downturns sometimes translate to heavier losses in altcoins attributable to quite a lot of elements, together with thinly traded property and low liquidity, however this additionally interprets into bigger bounces as soon as a restoration ensues.

Each day cryptocurrency market efficiency. Supply: Coin360

A number of tasks notched double-digit positive factors on Might 10, together with a 15.75% acquire for Maker (MKR), the protocol chargeable for issuing the DAI (DAI) stablecoin, which probably benefited from the fallout from Terra (LUNA) and its TerraUSD (UST) stablecoin.

Different notable gainers embody Persistence (XPRT) and its liquid staking token pSTAKE (PSTAKE), which skilled positive factors of 16.4% and 39.8% after Binance Labs revealed a strategic funding within the liquid staking platform. Polygon (MATIC) additionally bounced again with a 14.59% acquire.

Correlation with conventional markets stays

Regardless of the broadly held perception that the crypto market would act as a hedge to TradFi volatility, the correlation between Bitcoin and the inventory market has remained excessive in 2022.

If something, the volatility often related to the cryptocurrency market has begun to rear its ugly head in conventional markets, as evidenced by the value motion for the Dow Jones Industrial Common on Might 10, which rose more than 500 points only to give back at the time of writing.

The Nasdaq and S&P 500 have fared a little better, notching gains of 0.9% and 1.92%, respectively.

Further evidence to support a correlation between crypto and traditional markets was provided by Bitcoin analyst Willy Woo, who posted the following chart noting that “Fundamentals [are] taking a back seat to fear driven trading.”

BTC/USD 1-week chart vs. SPX 1-week chart. Source: Twitter

Willy Woo said,

“What I do think is we are not trading BTC, we are trading macro and equities. Right pane is SPX support, which will determine BTC directionality, left pane is the equivalent BTC support.”

Related: Michael Saylor assuages investors after market slumps hurts $MSTR, $BTC

The S&P 500 could drop much further

While May 10’s relief rally sent crypto and stock prices higher, market analyst Caleb Franzen posted the next chart warning a few bearish head and shoulders formation on the S&P 500 chart that might consequence within the lack of one other 500 factors.

SPX/USD 1-day chart. Supply: Twitter

Franzen mentioned,

“Arduous to select draw back targets after my $4,000 name acquired hit, however I feel the MOST LIKELY assist zone is down round $3,530–$3,590. That is the white resistance vary from September–October 2020.”

The general cryptocurrency market cap now stands at $1.444 trillion and Bitcoin’s dominance price is 41.5%.

The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, you must conduct your personal analysis when making a choice.