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

On May 10, the price action of crypto and traditional financial markets was very similar. After the May 9 rout that saw Bitcoin (BTC briefly fall to $29,730), traders experienced a relief bounce across all asset classes.

Market downturns usually lead to larger losses in altcoins because of a number of factors including low liquidity and thin assets. However, this can also translate into bigger bounces once there is a recovery.

Everyday cryptocurrency market performance. Source: Coin360

Several projects saw double-digit gains in May 10. Maker (MKR), which is responsible for issuing DAI (DAI), stablecoin, posted a 15.75% increase. This was likely due to the Terra (LUNA), and TerraUSD (UST stablecoin).

Persistence (XPRT), and its liquid stake token pSTAKE(PSTAKE) saw notable gains of 16.4%, 39.8% and respectively after Binance Labs made a strategic investment in this liquid staking platform. Polygon (MATIC), also saw a 14.59% increase.

The correlation with traditional markets is still evident

Although it was widely believed that the crypto market would be a hedge against TradFi volatility and have remained high in 2022, the correlation between Bitcoins and the stock markets has not changed.

The volatility associated with cryptocurrency markets has actually begun to show itself in traditional markets. This is evident by the price action of the Dow Jones Industrial Average on Mai 10, which rose over 500 points and then gave back at the time that this article was written.

The Nasdaq has seen some improvement with gains of 0.9% compared to 1.92% for the S&P 500.

Willy Woo, a Bitcoin analyst, posted this chart showing that “Fundamentals are taking a backseat to fear driven trading.”

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

Willy Woo stated,

“What I believe is that we aren’t trading BTC, but we are trading macro-equities.” Right pane shows SPX support which will help determine BTC directionality. Left pane shows the equivalent BTC support.

Related: Michael Saylor soothes investors after market crashes $MSTR, $BTC

The S&P 500 could fall even further

Although crypto and stock prices rose on May 10, the relief rally saw them rise, Caleb Franzen, market analyst, posted this chart warning of a bearish head-and-shoulders formation on the S&P 500 chart. This could lead to a loss of 500 points.

SPX/USD 1-day chart. Source: Twitter

Franzen said,

“It’s hard to pinpoint downside targets after my $4,000 call was hit. However, I believe the MOST LIKELY support area is around $3,530-$3,590. This is the white resistance zone that runs from September to October 2020.

The total cryptocurrency market is now worth $1.444 trillion, and Bitcoin’s dominance rate at 41.5%.

com. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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