For cryptocurrency holders or those who have exposure to the market through CFDs, for example, it has certainly been an exciting week. From the euphoria caused by new ETH records to the panic started by Elon Musk.
On Friday, the situation in the cryptocurrency market is trying to stabilize after the significant price drops that occurred on Thursday. First, Elon Musk stated that Tesla will not sell cars for bitcoins because the cars use too much energy, which comes from coal, and Tesla is seeking a government license to trade certificates in the US renewable energy market. Then the news hit the market that the Department of Justice and the IRS will investigate the operations of the world's largest cryptocurrency exchange, Binance.
It seems that the onslaught of negative news led to a cryptocurrency panic in a very short period of time, which is also reflected in the number of BTC that flowed into exchanges presumably to be sold. According to the CryptoQuant portal, more than $1 billion worth of bitcoins hit the exchanges on May 13, as there were more than 26,000 BTC. There was also a huge turnover on stable coins, including USDT, which could be linked to the fact that some of the holders of cryptocurrencies have just transferred their funds to virtual currencies based on the US dollar. Perhaps this capital is now considering whether to return to the market, if so, to which cryptocurrencies, or perhaps to return to fiat currencies. The next week seems to be crucial on this topic.
On the other hand, in the currently passing week, even despite the recent declines, ETH is doing well, oscillating at the $4k level. For the last 30 days, the rate of return is equal to 64 percent, and for the last 7 days it is 14 percent. Meanwhile, bitcoin for the last month records a decline of 19 percent, and for the last 7 days minus 11 percent. The capitalization of BTC has again fallen below $1 trillion. Thus, the cryptocurrency market further reminds us of its volatile nature.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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