On Thursday, the cryptocurrency market saw a slight rebound from recent trading lows, although prices remained well below the highs set in March, as volatility and weakness continued to dominate the market.
At the time of writing, there were less than 30 hours left until the next Bitcoin (BTC) halving, and cryptocurrency enthusiasts were eager to return to a bull market as the market has been in a correction phase since Bitcoin broke through $64,000 in early March.
According to data from Bitpush, Bitcoin rebounded from a low of $59,650 set on Wednesday, reaching an intraday high of $64,200 on Thursday before retreating to a support level of $63,300.
In the top 200 market capitalization on Thursday, altcoins experienced mixed gains and losses. Livepeer (LPT) had the largest price increase, rising 12.7% to $13.27, Jito (JTO) rose 10.9%, and Centrifuge (CFG) rose 8.5%. Meme token cat in a dogs world (MEW) fell 11.7%, leading the decline, while Core (CORE) fell 9% and Sui (SUI) fell 7.3%.
Currently, the total cryptocurrency market capitalization is $2.3 trillion, with Bitcoin’s dominance at 54.2%.
Concerns about US inflation and interest rates continue to be the root cause of volatility. Atlanta Fed President Raphael W. Bostic reiterated on Thursday that he does not expect a rate cut before the end of the year. Minneapolis Fed President Neel Kashkari also stated that patience is needed until inflation decreases, which may not happen until 2025.
The US stock market opened lower, rose to positive territory in the middle of the trading day, and then fell back into the red at the close. The S&P 500 and Nasdaq fell 0.22% and 0.52% respectively, while the Dow remained flat. Despite the decline in the stock market, the US dollar index rose 0.4% to 106.152, and the yield on the 10-year US Treasury bond rose 7.6 basis points to 4.638%.
Analysts from Secure Digital Markets stated, “As Wall Street seeks stability after continuous declines, the S&P 500 has experienced volatility. The Nasdaq, especially affected by the weakness in tech stocks, has fallen by over 3%, suggesting that the Nasdaq may experience a fourth consecutive week of decline, which would be the longest downturn since December 2022.”
They pointed out, “Overall, the recent stock market decline can be attributed to the weakening expectations of interest rate cuts, prompting investors to take profits after a strong performance in the first quarter of this year.”
Analysts predict that BTC may reach its next peak in September or October 2025 based on previous halving cycles. They added, “The current market conditions show that spot prices are higher than futures prices, reminiscent of the trend when Bitcoin was trading around $40,000, indicating a decrease in speculative trading, which is a favorable sign.”
The sentiment of crypto investors has turned pessimistic with the recent price decline, according to market intelligence company Santiment. In an April 18th post, the company shared a chart showing consistent bearish sentiment towards Bitcoin and other tokens like Ethereum: “People have consistently held a bearish sentiment towards mainstream coins, which strengthens the argument for further increases.”
The chart shows a decrease in the number of mentions of “bull market” or “bull cycle” on crypto social media since Bitcoin’s all-time high of $73,835 on March 14th. Meanwhile, the mentions of “bear market” or “bear cycle” have steadily increased. Historically, bearish sentiment is often observed at market bottoms.
Santiment analysts wrote, “Historically, price trends have been contrary to the expectations of retail traders. A rapid decline in FOMO coupled with a significant increase in FUD is a hopeful combination, and the crypto market may see a recovery before or after the halving.”
According to data from Alternative.me, the Cryptocurrency Fear and Greed Index plummeted from 76 last week and 79 last month to 57, but it still remains in the “greed” zone. This indicates that despite over a week of price adjustments, trader sentiment is gradually becoming more optimistic.
Author: Mary Liu
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