Forex Analysis & Reviews: 31.08.2023 - BTC drops after posting...

31.08.2023 01:45 PM

BTC drops after posting gains on Wednesday

On Thursday, Bitcoin started the trading session with a decline. At the time of writing the article, the BTC price hovers near $27,276.

According to the CoinMarketCap website, which tracks virtual asset quotes, Bitcoin reached a high of $27,553 and a low of $27,069 yesterday.

Yesterday, BTC's price jumped above $27,434. The cryptocurrency saw a weekly growth of over 3.00%. Notably, since August 18, Bitcoin has been trading below $27,000.

The crucial support factor for the digital currency market was the positive trends in the US stock markets. Following Wednesday's session, the Dow Jones Industrial Average increased by 0.11%, the S&P 500 rose by 0.38%, and the Nasdaq Composite gained 0.54%.

Interestingly, experts note an increased correlation between the cryptocurrency and stock markets in recent months.

Back in late February, analysts from the American investment company Bernstein highlighted that the correlation between digital gold and the NASDAQ Composite index dropped from 0.94 to 0.58 in January.

According to Bernstein, the cryptocurrency market has been balancing between bullish and bearish trends, awaiting further catalysts. However, its sensitivity to significant news and events in the financial world has significantly diminished.

In early 2022, analysts frequently emphasized the high correlation between the American stock market and the virtual asset market. This was amidst tense expectations regarding the geopolitical conflict in Eastern Europe and further actions by the US Federal Reserve. In mid-2022, experts from the investment company Arcane Research stated that the correlation between BTC and tech securities reached its peak since July 2020.

Meanwhile, economists from the analytical platform TradingView indicated that the correlation between the cryptocurrency market and the US stock market stood at 70% in Q4 2022.

Altcoin Market

Ethereum, Bitcoin's main competitor, also began Thursday with a drop. At the time of writing the article, the coin is trading at $1,703.

As for analysts' forecasts regarding the near-term price of ETH, they suggest that the future trend of the altcoin will depend on whether the coin falls below $1,600 or rises above $1,950.

Speaking of the top 10 cryptocurrencies by market capitalization, all coins here reported declines over the past day. Among them, Solana showed the worst results (-4.44%).

In the past week, among the top 10 strongest cryptocurrencies, Bitcoin led in terms of growth (+3.06%), while Solana led in terms of decline (-4.70%).

According to CoinGecko, the world's largest aggregator of virtual asset data, the past 24 hours saw MX TOKEN (+1.94%) top the list of gains among the top 100 most capitalized digital assets, while Astar (-5.87%) led the list of declines.

For the past week, within the top 100 cryptocurrencies, the worst results were demonstrated by the digital asset Pepe (-21.89%), and the best by Toncoin (+19.70%).

According to CoinGecko's data, as of Thursday morning, the total market capitalization of cryptocurrencies was above the crucial key level of $1 trillion, standing at $1.09 trillion. Over the past day, this indicator increased by 4.35%.

Since reaching its peak above $3 trillion in 2021, the cryptocurrency market's capitalization has lost over $2 trillion.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.