Crypto Markets Rally As Bitcoin Reclaims The $31,000 Level.

With Bitcoin returning to $31,000 and beyond, the broader crypto market has risen. Ethereum faces a $2,000 resistance test.

After nine straight weeks of losses for Bitcoin, the crypto market had a rare recovery on Monday, May 30. According to Juan Pellicer, Research Analyst at Into The Block, the rally can be attributed to the recent stock market recovery.

“I think the recent BTC price action is very influenced by the US markets bounce. SP so far is bouncing almost 10% from the lows of last week, so there might be part of the market believing that after the last sharp correction we are in for a fast recovery.”

The correlation between Bitcoin and the stock market separated last week, as the S&P gained 6.94% while Bitcoin lost 8.9%. The crypto sector, unlike traditional markets, never sleeps, and Bitcoin gained 3% over the weekend. However, once markets opened on Monday morning, not just Bitcoin but also stocks began to surge.

Bitcoin has been trading in tandem with major technology firms for some time as global markets have weakened. Pellicer believes that at least certain areas of the market are on the verge of a “V-shaped” revival. With Bitcoin down more than 50% from its high and numerous altcoins down more than 70%, crypto bulls would welcome this.

Cryptocurrencies have traded much like tech stocks rather than as a separate asset class and inflation hedge. However, occurrences like the Terra collapse, as well as concerns about the Ethereum merger and imposing legislation, have only exacerbated broader global economic concerns.

The Ukraine conflict, rising inflation, projected food shortages, and rising interest rates have all contributed to a negative feeling about cryptocurrency investing. With a score of negative 10, the fear and greed index currently implies that we are approaching peak fear.

It is also worth noting that the strength of the dollar influences the price of cryptocurrencies. Stablecoins such as USDT, BUSD, and USDC are used to value most cryptocurrencies against the US dollar. As the value of the dollar falls, the value of cryptocurrencies will rise naturally.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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