Altcoins rise as bitcoin traders hesitate to buy low

The likelihood of price action between cryptocurrencies and traditional financial markets remains strong on May 10, as traders enjoyed a relief bounce across all asset classes after May 9, when bitcoin (BTC) fell briefly at $ 29,730.

Market losses are usually due to larger losses in altcoins due to a variety of factors, including thinly traded assets and low liquidity, but also result in greater returns when rallies occur.

A number of projects posted two-digit gains on May 10, including a 15.75% gain for the Maker (MKR), the protocol responsible for issuing the stablecoin DAI (DAI), which probably benefited from the result from Terra ( LUNA) and its stablecoin TerraUSD (UST).

Other notable gains include Persistence (XPRT) and its staking liquid signal pSTAKE (PSTAKE), which saw gains of 16.4% and 39.8% after Binance Labs unveiled a strategic investment in the liquid stacking platform. Polygon (MATIC) also increased again with a gain of 14.59%.

There is always a correlation with traditional markets

Despite the widespread perception that the cryptocurrency market acts as a hedge against TradFi volatility, the correlation between bitcoin and the stock market remains high in 2022.

The volatility typically associated with the cryptocurrency market has even begun to show in traditional markets, as evidenced by the Dow Jones Industrial Average performance on May 10, which gained more than 500 points just to lose them as we write the these lines.

The Nasdaq and S&P 500 performed slightly better, with gains of 0.9% and 1.92% respectively.

Bitcoin analyst Willy Woo provided further evidence on the correlation between cryptocurrencies and traditional markets, posting the following chart noting that “basics [sont] under the guise of fear-driven transactions. “

Willy Woo basically says:

“What I think is that we are not trading BTC, but stocks and macro data. The right panel is the SPX support, which determines the direction of BTC, the left panel is the equivalent BTC support. ”

See also: Michael Saylor Gives Reaffirmation To Investors After Market Crash MSTR and BTC hurt

The S&P 500 could fall even further

As a May 10 relief rally pushed cryptocurrencies and stocks higher, market analyst Caleb Franzen said published the following chart warns of bearish head and shoulders formation on the S&P 500 chart that could result in the loss of another 500 points.

Franzen asserts,

“It’s hard to pick disadvantaged targets after my $ 4000 call has hit, but I think the most likely support area is around $ 3530- $ 3590. This is the white area of ​​resistance between September-October 2020. ”

The total capitalization of the cryptocurrency market now stands at $ 1.444 trillion and the bitcoin dominance rate is 41.5%.

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