How a bitcoin market ‘in extreme fear’ compares to the past, and what to expect next
Categories: Bitcoin US
Stablecoin USDTerra, or UST USTUSD, +23.63%, which was once among the top 10 largest cryptocurrencies by market cap, lost its 1 to 1 peg against the US dollar, falling as much as 6 cents on Friday, according to CoinDesk data . LUNA LUNAUSD, +150.00%, another cryptocurrency backed by UST, fell from over $80 to almost zero in early May, reducing its market capitalization by more than $40 billion since the beginning of April.Crypto trading firm QCP Capital wrote in a Friday note that it marks the “largest money destruction event in the brief history of crypto markets” since the creation of bitcoin in 2019. Meanwhile, bitcoin BTCUSD, according to data from CoinDesk, fell -3.19% on Thursday to $25,402, the lowest level since December 2020, having rebounded to nearly $30,000 on Friday. The Bitcoin Fear and Greed Index is currently at one of its lowest points, a sign of extreme fear.Tether USDTUSD, the largest stablecoin, fell by -0.02% to a low of 96 cents against the dollar on Thursday, before reaching a low of $1.more than $400 billion According to CoinGecko, crypto has been wiped out of the market during the past seven days. According to analysts at Messari, all sectors within the crypto space have suffered double-digit losses during this period, with cryptocurrencies belonging to Web3, the so-called next generation of the Internet, the biggest losers on average, 41%. The chain of events could herald the start of another “crypto winter”, said one industry participant, echoing an Common topics this week on Twitter,Some are more optimistic. “It’s a pattern. When we look at what happened in 2014, there’s a crash and there’s a huge panic. People say, oh, crypto is dead. It’s not coming back. But of course, it is back,” Mike Belshe, founder and CEO of crypto infrastructure provider BitGo, told MarketWatch in an interview.According to data from Glassnode, in March 2020, Bitcoin fell by 77% from cycle highs. According to data from Glassnode, during the bear markets of January 2015 and December 2018, Bitcoin lost 85.5% and 83.8%, respectively, from local highs. Hatfield estimated that bitcoin could drop to $20,000 by the end of this year, adding that in a worst-case scenario, it could return to its pre-pandemic levels, which were around $10,000. “I’m not predicting we’ll get there, but $10,000 would be a reasonable target,” Hatfield said. Hatfield compared bitcoin to Cathy Wood’s leading Ark Innovation ETF, ARKK, up +11.82%, up more than 70% from its peak and roughly the same level as in March 2020.