Cryptocurrencies experienced on May 10 a large market crash, losing over 10% in a single day of most of the coins. This is the second time in 2022 that most cryptocurrencies have suffered a price loss of over 10%. Over the last month, BTC has accumulated a 23.57% loss while Ethereum has a 26.32%. Meanwhile, US equities suffered slightly more moderated losses: S&P 500 a -11.07% while Nasdaq 100 a -14.93%:
As seen in the chart above, cryptocurrencies continue experiencing worse sell-offs than capital markets. The actual macro context of rising interest rates leads to most investors becoming averse to risky assets, which cryptocurrencies are due to their nature of highly volatile price performance.
The origins of the May 10 price drop came from US equities markets turning back on their short-lived recovery of last week. As has been seen in the previous months, the 30-day correlation between the cryptocurrencies markets and US equities indexes continues to grow, and this week achieved an all-time high for both BTC and ETH, with around 0.9 points both for S&P 500 or Nasdaq 100:
A correlation coefficient close to 1 implies a strong positive correlation between the two prices, meaning that the price of BTC or ETH and these indices have a highly statistically significant relationship, so they will tend to move in the same direction. Understanding how these relationships evolve is essential to understanding how macro markets affect the cryptocurrency market and where to look for leading indicators of crypto price movements.
It is valuable to look internally at how crypto holders are reacting to the recent price moves despite external factors. Bitcoin continues dominating the crypto market, so it is worth looking at…
Click Here to Read the Full Original Article at Ethereum – CryptoSlate…
