Bitcoin has continued to weaken over the past 12 hours, declining from $77,900 overnight to a 14-day low of $75,220 at 9:00 AM this morning. It is currently trading at approximately $75,526, a 24-hour drop of 2.76%. Ethereum also came under pressure, falling from $2,141 to a low of $2,053, also a near two-week low, currently trading at approximately $2,068, a drop of 3.26%.
The two major cryptocurrencies have retreated by about 8% and 12.8% respectively from their recent highs on May 11 (BTC $82,145 and ETH $2,373), and the downward trend has continued for nearly two weeks.
Encryption divergence intensifies
The weakness in the crypto market contrasts sharply with the strength of the US stock market.
On May 22, the Dow Jones Industrial Average closed up 0.58% at 50,579 points, setting a new record high.
The S&P 500 rose 0.37% to 7,473 points, marking its eighth consecutive week of gains.
The Nasdaq rose slightly by 0.19% to 26,343 points.
The core of this divergence lies in the fact that US stocks benefited from the decline in 10-year US Treasury yields and positive corporate earnings reports, leading to a continuous inflow of funds into heavyweight stocks. Meanwhile, the crypto market was hit by a series of pressures, including higher-than-expected inflation data (May 13th PPI), US-Iran geopolitical tensions, and pressure from long liquidations. In the past 24 hours alone, approximately $183 million in BTC long positions were liquidated.
While the stock market is focusing on "lower yields," the crypto market is still digesting "inflation hasn't fallen enough."
The fear index has been at 28 for two consecutive days.
The Crypto Fear & Greed Index has remained at 28 for two consecutive days, placing it in the "fear" zone. Compared to the index's rise to a neutral level above 50 in early May, market sentiment has clearly cooled.
Several key points to observe in the short term:
If BTC falls below the $75,000 mark (only about 0.7% from the current price), the next support level to watch is the $73,000 to $72,000 range, which is the starting area of the mid-April rally. Only if it can stabilize above $77,000 will there be a chance to retest the $80,000 resistance.
The $2,050 level is a recent support level for ETH; a break below this level could trigger an accelerated decline to $1,980. Only a recovery above $2,200 would alleviate short-term pressure.
The US markets will be closed next Monday for Memorial Day, and the low liquidity environment could amplify volatility. The bagholder hasn't appeared yet.
The above is not investment advice.
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