Bitcoin is still struggling near $29,000, as activity on Bitcoin (BTC) options signals that investors are becoming more bearish. In the last week, Bitcoin has declined to nearly $25,401 due to systemic risks in the crypto ecosystem and inflation fears in the broader economy. As of Friday, the asset had fallen for seven weeks in a row.
In recent months, the asset’s price swings have been significantly associated with those of the US stock market, with weak earnings reports and hawkish statements from the Federal Reserve affecting bitcoin prices.
The S&P 500 index briefly entered bear market territory on Friday, falling more than 20% from its all-time high and perhaps putting an end to the bull market that began in March 2020.
After plunging as much as 2.3 percent earlier in the day, the S&P 500 managed to sneak 0.01 percent up at Friday’s closing bell, or nearly 18 percent lower than its January 3 record high. Bitcoin and Ethereum, trading on exchange apps like OKX, continue to show an extremely high correlation with the traditional market. Intotheblock analytics gives the 30-day correlation as 90% At the time of writing, Bitcoin was trading at $29,202, down 4%.
Alternative cryptocurrencies such as VeThor Token (VTHO, +21.76%), Monero (XMR. +8.06%), Cosmos (ATOM, +5.44%), Zcash (ZEC, +4.06%), and Fantom (FTM, +5.53%) were trading up in the green at press time, defying the general market selloff.
Billions of dollars have been moved out of the Terra ecosystem in the two weeks since TerraUSD (UST) lost its peg, generating significant investor losses.
Funds held in decentralized finance (DeFi) applications built on Terra have dropped to $135 million in total locked value currently, down from more than $29 billion at the start of the month, according to recent data. Terra DeFi’s locked value peaked at $30 billion in early April.
The losses occurred as UST lost its 1:1 peg to the US dollar amid a broader market downturn. As a result of investors exchanging UST for other stable coins, the UST dropped to $0.04 on May 14.
Terra developers propose a hard fork of the network, which would result in the creation of a new blockchain. However, it appears that the community seems not to be in total support. An online pilot poll conducted last week found that 92 percent of respondents opposed the planned change.
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