Bitcoin and ethereum have dropped by 7% over the last 24 hours, with bitcoin approaching $32,000 and ethereum trading near $2,400. And one expert warns bitcoin could drop even further, below $30,000 for the first time since July 2021.
Bitcoin could “potentially get a mini-bounce at $35,000, but unless we break the trend line at approximately $37,000, I’m calling for $29,000 in the coming weeks or week,” says crypto expert Wendy O in a recent TikTok video.
Cryptocurrency Prices Today: Bitcoin, Ethereum
It’s been a shaky start to the week for Bitcoin and other cryptocurrencies, largely driven by ongoing macroeconomic uncertainty. Bitcoin, the largest crypto, dipped below $36,000 Saturday and continued to nosedive throughout the weekend, hitting its lowest point in over a year Monday.
The crypto markets have been increasingly tracking the stock market, which has been trading in the red recently. Stocks fell sharply Monday, as the market sell-off continued after the Federal Reserve announced its biggest interest rate increase in over 20 years last week.
“The overall market has noticed the high correlation to Bitcoin prices and the general equities markets,” says Armando Aguilar, head of alternative strategies and research for Ledn, a digital asset savings and credit platform. “The S&P 500 and NASDAQ have had the largest correlations to Bitcoin with 0.88% and 0.91%, respectively. A correlation of one means that they move equally one to the other.”
For weeks, the crypto market — like the stock market — has also been under pressure as investors grapple with continued surging inflation, the ongoing swirl of economic events stemming increasingly from Russia’s invasion of Ukraine, and tighter U.S. monetary policy by the Fed.
Bitcoin’s Price Today (May 9)
Bitcoin began to descend at the end of last week and continued to fall throughout the weekend, trading between a relative range of $33,000 and $37,000. Bitcoin’s big drop Monday is just the latest reminder for investors that crypto assets come with extra risk and volatility, especially in times of economic and political uncertainty like we’re in now.
But Bitcoin’s new low doesn’t come as a surprise to Wendy O, who in April predicted Bitcoin would hit $33,000 sometime before July, based on her technical price charts.
“I tweeted this April 17, 2022: ‘I am getting 2021 April-May vibes, which means potential bearish until July. Things I’m watching [include] price action, inability to effectively breakout, NFTs go off.’” O says.
Even with the big drops, Wendy O is still bullish on bitcoin in the long run.
Bitcoin’s high point of the year so far remains in the earliest days of January, when it nearly hit $48,000. In that same month, bitcoin also dipped below $34,000. Bitcoin has lost more than 50% of its value since its Nov. 10 all-time high above $68,000.
Ethereum’s Price Today (May 9)
Ethereum’s price has been rapidly declining over the last few days, trading at $2,300 Monday. Ethereum is down over 15% over the past week amid a big retreat in Bitcoin and the stock market.
Like all cryptocurrencies, Ethereum tends to follow Bitcoin’s lead. If Bitcoin is falling in price, ethereum is likely falling, too. But ethereum has also been grappling with anticipation for its massive software upgrade.
Over the next few months, ethereum is planning to move from proof-of-work (PoW) to proof-of-stake (PoS), also known as “The Merge.” It’s a big deal because it’ll change how transactions on Ethereum are ordered, making it more efficient and sustainable for widespread use.
Ethereum developer Tim Beiko recently revealed that “The Merge” won’t happen in June as previously forecast, though it’s set still to happen sometime before the end of 2022. “No firm date yet, but we’re definitely in the final chapter of PoW on ethereum,” Beiko tweeted on April 11.
That, along with several other macroeconomic factors, has made for a shaky start to the year for ethereum, which in January dropped below $2,200 — the lowest ethereum’s price had been since July 2021. As of Monday, Ethereum is inching closer to its January low.
What Investors Should Know About Cryptocurrency
The prices of cryptocurrencies are extremely volatile. That means they are just as likely to fall down as they are to climb, and experts say that’s something crypto investors will have to continue dealing with.
As long as you’re only investing what you’re OK with losing and have a long-term investment strategy in place, there shouldn’t be cause for concern with bitcoin and ethereum’s recent drops.
Most financial experts recommend investing less than 5% of your total portfolio in crypto. You should also make sure you’re prioritizing other aspects of your finances ahead of investing in crypto, such as saving for an emergency, putting money away in a retirement account, or paying off high-interest debt.
If it seems like the crypto market has been acting increasingly like the stock market lately, it’s because it has been. Increased institutional adoption of crypto has made its market more intertwined with the stock market, which in turn, has been largely impacted by the war in Ukraine, surging inflation, and the Fed’s tightening monetary policy, experts say.
In the short term, these macroeconomic factors have created some noise and extra volatility in the crypto and stock markets, but this is usual during times of uncertainty.