Bitcoin price bounced on Friday and wavered above the $30,000 mark, after making a huge drop earlier in the week. At the same time, stock prices climbed higher. This comes at a time when investors are digesting the crash of Terra’s UST stablecoin.
According to CoinMetrics, Bitcoin climbed by 5.3% and was lastly trading at $30,046.85. Prior to that, Bitcoin price had fallen to $25,401.29 on Thursday, the lowest price point since December 2020. Ethereum price also made a 6.6% increase, and it was lastly trading at $2,063.67.
Bitcoin and Ethereum finished their worst weeks since May 2021, after dropping by 15% and 22% respectively. This marks Bitcoin’s seventh down week in a row.
Crypto markets have struggled since the start of this year amid the wide market crisis. Bitcoin, which is the largest cryptocurrency, has shown a greater correlation with tech stocks, and the three major stock exchanges were higher on Friday.
It has been a tough week for cryptocurrency investors as they watched the falling apart of Tarra’s UST stablecoin and luna token. This temporarily scared crypto investors and pushed the Bitcoin price downwards.
Addressing CNBC, Sylvia Jablonski, the CEO and CIO of Defiance ETFs said, “We have a lot of near-term chaos, this has been just the year of fear, panic, and a lot of investors sitting on their hands.”
“When you get this news now about Terra and the sister coin, luna, crashing, that just creates this absolute wall of worry,” she continued, “and you have the combination of the Fed and relentless market volatility coupled with a loss of confidence in crypto – a lot of investors start to run for the hills.”
However, by Friday, Bitcoin had started behaving like equity.
According to Yuya Hasegawa, a crypto market analyst at Bitbank, a Japanese Bitcoin exchange, Bitcoin bounced because it passed “the worst part of the week.”
Cryptocurrency and stock prices fell this week after the Bureau of Labor Statistics announced that consumer prices had risen by 8.3% in April, which was much higher than it was expected.
“The market glimpsed a little bit of hope this week that inflation may have hit the ceiling, and it did it without the effect of the monetary tightening that the Fed decided earlier this month,” Hasegawa stated.
$30,000 means a lot to cryptocurrency investors since this is the first crypto crash for many. Before Bitcoin price began to slip this month, it had been trading between $38,000 and $45,000 this year, which is not bad from its November all-time high of almost $68,000.
Did it Mark the Support Level?
The recent Bitcoin comeback can be an indication that the crypto has marked its support level or it is on the way to making further losses. However, there are some indicators that show that Bitcoin could have reached its bottom.
One of these indicators is that Bitcoin RSI remains in the oversold territory. With the indicator in that region, there is not much that sellers can do to push Bitcoin price further down, especially after the powerful recovery that has been recorded.
Even though the crypto coin has fallen below $25,000 for the first time in over a year, the bulls did not give complete control of the crypto market to the bears. This means that it’s more likely for Bitcoin to have reached its support level after hitting $24,000. The momentum by which Bitcoin rose from this point indicates there is some extra strength to carry it further.
At the same time, Bitcoin has turned green on the 5-day moving average. Although this indicator doesn’t reveal much like its 50-day counterpart, it signals the return of a bullish Bitcoin move. If this bullish trend continues when the support level has been marked at $24,000, it will be easy for Bitcoin to recover its previous $35,000 mark.