Bitcoin, Ethereum, and other major currencies rose late on Thursday as fears of a bear market in equities and a weaker dollar added to the apex currency’s appeal. The global cryptocurrency market cap rose 4.8% to $1.3 trillion.
|Coin||24 hours||7 days||Price|
|Ethereum ETH/USD||5.3%||3.1%||$ 2,018.07|
|cryptocurrency||24-hour change % (+/-)||Price|
|Kyber Network Crystal V2 (KNC)||+21.2%||$2.66|
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What happened: The S&P 500 is down nearly 19% below its all-time high reached in early 2022; the index is now hovering close to bear market territory. A 20% decline below all-time highs is interpreted as a bear market by many experts.
S&P 500 and Nasdaq futures were trading 0.4% and 0.7% higher, respectively, at press time.
The dollar index, a measure of the dollar’s strength against six other currencies, fell 0.05% to 103.74, while U.S. 10-year yields fell to 2.772, the lowest since late April, according to a Reuters report.
Senior Market Analyst at OANDA Eduardo Moya noted the dollar’s “free fall” as investors buy Treasuries with concerns that the economy is heading for a “tough time”.
“A weaker dollar and bear market equities fears are making Bitcoin attractive again,” Moya said in a note, seen by Benzinga.
“It looks like the fallout from all the drama of stablecoins sending cryptos down is finally fading. Bitcoin looks set to consolidate here, but bulls should be happy to see prices aren’t mimicking what happens with the stock market.”
Pointing to Bitcoin Relative Strength IndexRekt Capital tweeted on Thursday that the indicator is entering a “period that historically preceded outsized returns on investment for long-term investors.”
The cryptocurrency trader said previous reversals of this level were seen in January 2015, December 2018 and March 2020.
#BTC The RSI is now entering a period that historically preceded outsized returns on investment for long-term investors.
Previous rollbacks of this area include January 2015, December 2018 and March 2020
— Rekt Capital (@rektcapital) May 19, 2022
Michael van de Poppe tweeted that due to the recent “heavy crash” there is a 20% to 25% chance of relief on the market. The analyst put Bitcoin around $34,000 to $36,000.
The total market capitalization of #crypto swept lows at $1.1 trillion and looks set for an upward relief.
Because of the massive crash, there seems to be a 20-25% chance of market-wide relief here.
— Michael van de Poppe (@CryptoMichNL) May 19, 2022
The futures market has another story to tell. Bitcoin’s put/call ratio hit a 12-month high, with open interest hitting a 12-month high of 0.72 this week. This is a bearish indicator, according to Delphi Digital.
BTC Sell/Call Ratio of Interest and Open Volume — Courtesy Delphi Digital
The on-chain analytics firm said the put/call ratio reached 0.96 before Bitcoin’s price dropped more than 50% in May 2021.
The put/call is a measure of the amount of put purchases in relation to calls. A high ratio means investors are speculating on whether Bitcoin will continue to sell or could point to investors hedging wallets against a downturn.
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