As buyers remain on the sidelines, Bitcoin, the flagship cryptocurrency fell below $30,000 in the early hours of Saturday. The cryptocurrency gained some ground last week, but it was unable to outperform the majority of alternative cryptocurrencies (altcoins).
Although it did not break through the channel barrier down to $2,000 on May 31, the leading altcoin, Ether, remains negative. This three-week price pattern could indicate that a retest of the $1,700 support is underway.
With the exception of Axie Infinity, Chiliz, and Helium, all other major crypto tokens were trading at a discount. In the majority of cases, however, the losses were limited. Internet Computer was among the worst performers, dropping 13%, while Solana, Tron was down 9%.
What you should know
- The resilience of Bitcoin compared to other cryptocurrencies can be explained by the fact that investors in the space consider BTC to be the most stable digital asset today.
- Critics of Bitcoin may still refer to its extreme volatility, but it is still more established than some other tokens.
- While the bear market is in effect, investors who are worried about newer and smaller cryptocurrencies can shift their money from altcoins to the flagship crypto asset.
- Bitcoin Fear and Greed Index has fallen in recent days, indicating that sentiment among crypto traders is still pessimistic. The indicator moved deeper into the “severe fear” zone, similar to what happened in January of this year, just before the price of BTC started to rise.
- Still, there are technical signs that bitcoin’s upside is limited, especially near its 50-day moving average, which is currently $34,000.
Gold was also lower on Friday and is down 5% over the past three months, compared to a 25% drop in Bitcoin and a 4% drop in the S&P 500.
Some crypto traders have reduced their risk exposure so far. Due to their higher risk profile, cryptocurrencies typically fall more than bitcoin during bear markets. As a result, when the markets are weak, the market value of bitcoin rises relative to the overall crypto market capitalization (dominance ratio).