New York Stock Market Drops, Why Are Cryptocurrencies Rising?

▲ Bitcoin (BTC), Nasdaq (NASDAQ)/ChatGPT generated image ©

Although the New York stock market plummeted due to geopolitical risks, the cryptocurrency market is showing signs of 'decoupling' by continuing its upward trend.

According to CoinMarketCap as of 9:57 AM KST on May 5, the total cryptocurrency market capitalization rose by 1.7% from the previous day to approximately $2.64 trillion. Bitcoin (BTC), the market's leading asset, recorded $80,110.44, and Ethereum (ETH) recorded $2,357.07, each maintaining an upward trend of around 2% over 24 hours. The market's Fear & Greed Index remained in the 'Neutral' zone at 47, and the Altcoin Season Index was 38, interpreted as still being in the pre-entry phase of a full-fledged altcoin market.

Major altcoins also showed a simultaneous upward trend. XRP recorded $1.39, Solana (SOL) recorded $84.30, and Dogecoin (DOGE) recorded $0.1107, continuing a moderate upward trend. Dogecoin, in particular, showed relatively strong performance, rising 11.78% on a weekly basis. In contrast, stablecoins like Tether (USDT) and USD Coin (USDC) maintained stable movements around $1.

This bull run is noteworthy as it contrasts with the traditional financial market. The New York stock market showed weakness with the Dow Jones falling 1.13%, S&P500 0.41%, and Nasdaq 0.19% due to rising US-Iran tensions and risks in the Strait of Hormuz. While surging international oil prices and rising bond yields fueled inflation concerns, cryptocurrencies, on the other hand, saw an inflow of funds, highlighting their nature as alternative assets.

Behind the bullish trend are Bitcoin-centric institutional demand and regulatory expectations. Recent large-scale Bitcoin purchases by companies and continuous inflows into Bitcoin spot ETFs have strengthened the demand base, and expectations for the passage of the US crypto market structure bill and the Clarity Act are also supporting investor sentiment. Additionally, a rotation into some altcoins is further expanding the overall market's upward momentum.

In the short term, Bitcoin's ability to hold the $80,000 support level is considered a key variable that will determine the market's direction. If it maintains this price level, a test of the $84,000-$85,000 range is expected, but if it falls below $77,000, a correction is also possible. The current trend is dominated by cautious optimism, and the direction is expected to be determined by ETF fund flows and macroeconomic variables.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*