The world's largest cryptocurrency fell by 8.4% on Wednesday. It broke through the low of July 2021 and closed at $28,400.
On Thursday, digital gold has already lost 14%. It is now hovering around $26,900.
Bitcoin tumbled below the $27,000 barrier for the first time since December 2020.
Since November, BTC has lost more than 55%. Back then, the coin hit the all-time high of $69,000.
On Tuesday, the flagship cryptocurrency rose by 0.1%, closing at $31,000. The quote plummeted by almost 10% and touched summer 2021 lows a day earlier. Amid a fall in the stock market, the price closed below $31,000 on Monday.
Notably, the correlation between the crypto market and the equity market is believed to be at a high level. Both markets are anxiously awaiting the consequences of geopolitical developments in Eastern Europe and further steps by the Federal Reserve.
April performance of the flagships of both markets can serve as proof of the high stock-crypto correlation. Thus, the NASDAQ Composite lost over 12% last month, dropping to its lowest level since 2008.
Meanwhile, bitcoin sank by 16.2% in April to the monthly low unseen since 2011.
According to Arcane Research, the correlation of BTC with tech stocks has hit the highest level since July 2020.
Such a close correlation of digital gold with the NASDAQ makes investors doubt whether the cryptocurrency can become a hedge against inflation.
Cryptocurrency market outsiders
A fall in BTC was followed by a drop in the leading altcoins on Wednesday. Ethereum descended by 12.5%, Binance Coin lost 15.7%, and the value of Solana decreased by a third (33.4%). Above all else, Terra collapsed by 97%.
A fall in the crypto market came in line with a decrease in the main US stock indices. Additional pressure on both markets came from the disappointing US inflation report.
Mixed forecasts
The high volatility and unpredictable behavior of the cryptocurrency market urge experts to make the most unexpected statements and forecasts for its future. According to Galaxy Digital CEO Michael Novogratz, the crypto market has not reached the bottom yet. The trader believes that the correlation between BTC and the permanently declining US stock market will be on the rise until digital gold hits a new equilibrium.
The bearish crypto market might soon become bullish, ARK Invest founder Cathie Wood projected on Monday. She also foresees a decrease in the bitcoin-NASDAQ Composite correlation, calling it temporary.
Meanwhile, Cardano founder and Ethereum co-founder Charles Hoskinson believes another crypto winter has descended upon the crypto market. There is not a single significant factor that can provoke a rebound in the market, he asserted.
Economist Benjamin Cowan is of the opposite opinion and says that cryptocurrency will soon see a spectacular rise.
Popular Bitcoin critic Peter Schiff predicts a fall of the first cryptocurrency to $10,000. The main condition for this may be a sharp breakthrough of $30,000, Schiff suggests.
Jesse Powell, the CEO of Kraken Exchange, expects BTC to drop to $20,000. When the coin reaches this level, the investor plans to use the lion's share of his capital to buy cheap bitcoins.
What statistics say
As history shows, May is considered quite a good month for Bitcoin. Thus, over the past 11 years, BTC has closed the month with an increase in seven cases and a drop in four. The average rise in May is about 27%, while the decline is 6%. If this May the first cryptocurrency decides to repeat the approximate gains of the past years, it can grow up to $48,000 or collapse to $32,000 in a month.
