The cryptocurrency market was drastically corrected on May 12th After the dog token hype subsided when Ethereum co-founder Vitalik Buterin sold large quantities of Shiba Inu (SHIB), Dogelon Mars (ELON) and Akita Inu (AKITA) in the market and donated the proceeds to charity .
Data from Cointelegraph Markets Y. TradingView show that while meme tokens were being sold, Bitcoin (BTC) price continued its recent weakness, falling nearly 8% to $ 53,500 before rebounding to the $ 54,700 level.
Ether (ETH) was less affected by the sell-off and In fact, it managed to rebound over USD 4,000 Applauded Buterin’s decision to donate his meme coins to various charities to help claim their daily losses. Traders are also confident that the decline in meme token trading activity will help lower gas fees on the Ethereum network.
Traders aren’t sure what’s next for Bitcoin and Ether
If the trading activity for meme tokens decreases, Traders may turn their attention back to Bitcoin, but there is some uncertainty about what might happen next.
According to Chad Steinglass, Chief Operating Officer of the crypto capital markets company CrossTower, “BTC actually does a decent job of storing value.” especially in comparison to broader financial market developments, including the serious pressures facing growth stocks “exacerbated by May 12 CPI pressures interpreted as triggering earlier Fed tightening”.
Highlighted stone glass The fact that Bitcoin has been out of the trading range for 3 months could be a symptom of its new role as a store of value, hypothesizing that traders who hold BTC in their investment portfolios may be “selling BTC and especially GBTC” to increase cash liquidity while reducing overall leverage. “
Stone glass said:
BTC has largely held its own against this headwind. It took some quick steps but saw strong support on every significant sell-off. Maybe it really does mature into a more stable asset for now, at least. “
When it comes to aether, Steinglass has stated that “Due to” upcoming protocol changes that will eliminate inflation and also create incentives to hold tokens as evidence of use “, ETH is in a new pricing regime. makes it difficult to know what a “Good new fair value for ETH”.
Regarding ether, Steinglass said:
“We could easily have more space, although it seems like there is something wrong with the updates that could quickly derail things.”
David Lifchitz, ExoAlpha’s managing partner and chief investment officer provided additional information on the outlook for Ether The “hot phase” of Ether in 2021, in which the price has risen by more than 455% since the beginning of the year and since 100%. The percentage increase over the past three weeks can be considered as “Buy The Rumor, Sell On The News” before the next EIP 1559 update in July.
â € œIf it was in just a few weeks, it wouldnâ € ™ t hurt to take some profit off the table. What hurts in the long run is not to miss the last drag, but to stay inverted when the music stops. “
On Bitcoin, Lifchitz highlighted concerns about limited-range trading, where BTC has recently stagnated.
Lifchitz said Bitcoin currently shows:
“There is no upward (or downward) catalyst in sight. The risk of staying fully exposed far outweighs the potential return.”
The financial markets are falling due to fears of inflation
Equity markets also sold off on fears of rising inflation, which has risen across many sectors of the economy.
Recent consumer price index data shows that prices have risen the fastest since April 2007, and some economists warned the metric shows no signs of slowing for the foreseeable future.
As a result of this pressure The SP 500, Dow and NASDAQ posted significant declines on Wednesday, ending the trading day down 2.14%, 1.99% and 2.67%, respectively.
Despite the market recession Altcoins like AAVE gained 30%, while Polygon (MATIC) and Kusama (KSM) gained 18%.
The total market cap for cryptocurrencies is now $ 2.414 trillion, and Bitcoin’s dominance rate is 42.2%.
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