Altcoins: Can the crypto market break away from the stock markets?
Bitcoin (BTC) and several altcoins are currently trying to break free from the weakness in the traditional financial market.
Bitcoin (BTC) and several altcoins are currently trying to escape the weakness in the traditional financial market.
Despite a brief rise in the morning yesterday, the crypto market is still not able to break away. Later in the afternoon, the major stock index, the S&P 500, slid to a new year-to-date low and pulled the crypto market down with it. In the morning hours today, the US index hit the important support level of 3,600 points and has managed to defend it for now. More and more new interventions by central banks (aimed at stabilizing their own currencies) are currently causing huge disruptions in global financial markets.
Is the crypto sector decoupling from the rest of the financial market?
That’s why it’s positive that Bitcoin and Ethereum, despite fresh year-to-date lows in US stock indices, haven’t formed new lows themselves. An upward counter-move in the traditional financial market could therefore have a particularly positive effect on the crypto market. Even a new yearly high in the U.S. dollar index (DXY) recently didn’t have the negative impact on the crypto sector that it did in previous weeks. Bitcoin option expiries worth $1.96 billion coming this Friday could bring more volatility. Ethereum options worth $1.83 billion will also settle on Friday. In line with the current market conditions, it would be fairly favorable for all parties if the prices of the two largest cryptocurrencies show a recovery by Friday morning around 9:00 a.m. (CET).
Investors seem to be pursuing more and more individual strategies
There are currently many market players with varying trading strategies and price targets across different asset classes. This mix of bullish and bearish moves leads to exaggerated, sometimes irrational price swings in volatile markets. Despite the unfavorable market conditions, some altcoins have held their ground over the last seven trading days and posted double-digit gains. Especially Quant (QNT) up 30% and the Tokenize Xchange (TKX) token up 20% have successfully resisted the downtrend. Despite these positive moves, total market cap can't break out of the dips from the past weeks and stays around $900 billion. Getting back above the $1 trillion mark could provide fresh positive momentum.
Price developments of the top 10 altcoins
A look at the top 10 altcoins shows a mixed picture this week. While Ethereum (ETH) and Cardano (ADA) are down slightly, about 2 percentage points for the week, Shiba Inu (SHIB) is the weekly winner among the top 10 with a 4% gain. Besides the meme coin, Solana (SOL) and Ripple (XRP) have turned the correction trend around, each gaining a bit over 3 percentage points. More than half of the big altcoins are outperforming Bitcoin.
The crypto market can gain only two percentage points versus last week. Despite the substantial price declines in global financial markets, the crypto sector is generally doing well.
Stability of the top 10
Despite the ongoing strength of the US dollar and new year-to-date lows in many major stock indices, Bitcoin has held up relatively well over the last seven trading days. BTC dominance is stabilizing between 40% and 41%. A dynamic breakout above the 41.70% high could spark a broader crypto recovery and overtake most of the altcoin sector. But only if trading volume increases would the price rebound be meaningful.
If the Nasdaq100 and S&P 500 also stage a rebound and riskier assets are bought more often again, a positive move in the crypto market is expected. But if US stock indices slide to new year-lows in coming sessions on new economic data, Bitcoin could retest its year-low. Looking at the top 10 altcoins, we see another reshuffling of spots. Polygon (MATIC) has again overtaken Tron (TRX) to take 10th place, pushing Tron out of the top 10 list of cryptocurrencies.
