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Crypto Market Update

Bitcoin’s high correlation with the NASDAQ sees price plummet

The blood is in the streets, but there could be more to come…

Crypto Banter by Crypto Banter
May 6, 2022
in Breaking News
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Overview

  • Bitcoin tanks.
  • NASDAQ tanks.
  • S&P 500 tanks
  • Everything tanks. 

Oh dear. Or is it? Having broken out of a descending wedge pattern on the back of Wednesday’s FOMC meeting, Bitcoin crashed back to earth with a bang yesterday, as tech stocks, in particular, experienced one of the sharpest pullbacks in over a year. 

How’s that for an ugly candle?

www.tradingview.com 

Suffice to say, the high volume you can see was the result of longs getting totally REKT. In fact, yesterday saw the highest instance of long liquidations since January 2022:

$165 million in #Bitcoin Long Liquidations today.

This is the highest daily long liquidation amount since the end of January 2022 crash. pic.twitter.com/vwfp0ZzQNb

— On-Chain College (@OnChainCollege) May 6, 2022

Meanwhile, the Dollar Index (DXY) is testing the highs again, just about poking its head above a key resistance level under which it had been consolidating for the past week. 

www.tradingview.com

Which begs the question, why is this happening?  After all, the FOMC meeting on Wednsesday seemed to provide the market with some shortlived relief. 

Some analysts are pointing to rising inflation across the Atlantic as a key driver of this recent sell-off event. 

Yesterday, the Bank of England announced it would raise interest rates by 100 basis points in an effort to drive down inflation, which is estimated to be at around 10%. It is the single largest rate hike since the 2008 financial crisis, and to add insult to injury, they have also acknowldged that a recession is practically unavoidable. 

NEW: Bank of England puts up interest rates by 0.25% to 1%, and warns inflation could hit 10% by end of year, the highest since 1982.

The Bank also warns the economy is set to shrink next year putting the UK at real risk of recession. Grim times ahead.

— Pippa Crerar (@PippaCrerar) May 5, 2022

Whether this had such a direct effect on US markets is unclear, but it points to a clear global trend that investors will be keen to mitigate against themselves against. Risk on, for now, is definitively not back on. 


Crypto Market update 🌍

Well, this will be fun… 

Yep, as you can see, apart from Ancor protocol, 9 out of the top ten ‘notable gainers’ were stabelcoins which pretty much tells you everything you need to know. 

But how’s this for an analogy: 

Remember in Titanic when one end of the boat was lifted up while the boat, in reality, was sinking in its entirety?

USD is currently “rising” compared to other fiat, Fed is on deck playing cello, WEF is looting rooms, & #bitcoin plebs are trying to help people into lifeboats. pic.twitter.com/s9vMuMcqnr

— Jim Crider (@JimCriderTX) May 5, 2022
Bitcoin Fear and Greed Index22 Extreme Fear
“Crypto” Google Trends33 (36)
“Bitcoin” Google Trends42 (46)

Newswatch 📰

With Mayor Adams having positioned himself as the ‘pro-Bitcoin’ candidate in the run up to the recent Mayoral election, pledging to make NYC the home of crypto innovation in the country, the state is now considering a moratorium on all Proof-of-Work mining operations.

CNBC: The state of New York wants to ban new bitcoin mining operations, a move that some industry insiders fear could have a domino effect across the US. The bill, which is making its way through Albany, calls for a two-year moratorium on certain cryptocurrency mining operations.

— Markets & Mayhem (@Mayhem4Markets) May 6, 2022

UST adoption continues to with its unstoppable momentum…

1/

📢 Great news for all cross-chainers!@Binance will support UST(Portal)!

Soon, Binance is going to execute a contract swap of UST(Shuttle) for UST(Portal).

UST(Portal) will use the “UST” ticker, while UST(Shuttle) will become “WUST”.

So what?
👇👇👇

— Wormhole🌪 (@wormholecrypto) May 5, 2022

NFT volume shows no sign of slowing down:

​​https://twitter.com/cointelegraph/status/1522452109043507200?s=21&t=-j8-ZsUgW5lS1SSMRuwq1g 

The Luna Guard Foundation continues to put its money where its, buying $1.5bn worth of Bitcoin across the past few days.

LFG acquired 1.5B worth of bitcoin over the last few days

A lot more to go

Now time to water the plants 🌱 https://t.co/roSJfVVa3k

— Do Kwon 🌕 (@stablekwon) May 5, 2022

El Salvador approved its first license for Qredo to operate as a Bitcoin service provider

El Salvador approved its first license for @QredoNetwork to operate as a Bitcoin service provider.

The firm became the first and only company to provide BTC custody in the country. https://t.co/XV2kPgiyf1

— Cointelegraph (@Cointelegraph) May 6, 2022

Bitcoin.com raises $33.6 million in private token sale

ICYMI: https://t.co/oRRdulRENT raises $33.6 million in private token salehttps://t.co/uTZkXkomsU

— The Block (@TheBlock__) May 5, 2022

$410 million has been liquidated from the cryptocurrency market in the past 24 hours. 

JUST IN: $410 million has been liquidated from the cryptocurrency market in the past 24 hours.

— Watcher.Guru (@WatcherGuru) May 5, 2022

Block Inc misses on its earning report

$SQ (Block Inc.)

EPS of $0.18 misses by $0.02
Revenue of $3.96B misses by $180M

"Transaction-based revenue was $1.23 billion in the first quarter of 2022, up 28% year over year

Subscription and services-… https://t.co/8v2x01jp6H

— MajorInvesting (@InvestingMajor) May 5, 2022

Banter’s take

It’s pretty grim out there: macro and technicals are all pointing in the same direction, and its hard to see a catalyst that will pull markets out of this downward slump. Time to buy the dip? At the very least, it might be time to slowly Dollar-Cost-Average (DCA) into fundamentally sound projects, but in the understanding that there could be a while yet of continued downside action – you don’t want to try and catch a falling knife, but average in over time and bring down your cost basis.

Tags: MARKETS
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