US Stock Market Reaches New Highs…But Sell-Off Bomb Hits Cryptocurrency Market

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

Bitcoin (BTC) has once again failed to break past $82,000, leading to increased selling pressure across the broader cryptocurrency market. Despite the strong performance of the US stock market, the combination of a strong dollar and institutional profit-taking has pushed the market back into a wait-and-see phase.

According to investment media FXStreet on May 15 (local time), the total cryptocurrency market capitalization, after being blocked by strong resistance near $2.73 trillion, has now fallen to around $2.67 trillion. Although the record-high trend in the US stock market stimulated risk-asset preference, the cryptocurrency market failed to break through key resistance, according to analysis. The media explained that the strong dollar, which led to a weakening in gold prices, is also weighing on the cryptocurrency market.

Bitcoin recently rebounded to around $82,000, testing the 200-day moving average, but this level continues to act as strong resistance. Currently, Bitcoin has fallen back to the low $80,000s. The media analyzed that growing caution in the US stock market is also increasing pressure for cryptocurrency fund outflows, and there is a high possibility of re-testing the lower $79,000 level by this weekend.

Institutional investors are also becoming more cautious. Glassnode diagnosed that institutional investors are focusing on profit-taking rather than panic selling during the recent rebound. CryptoQuant also assessed that further downside for Bitcoin cannot be ruled out given the current market structure. According to Bitfinex, the volume of Bitcoin purchases by companies for digital asset treasury (DAT, cryptocurrency financial strategy companies) purposes has decreased by 80% in one week.

Meanwhile, Ethereum (ETH) continues to experience a decrease in supply. According to SharpLink's aggregation, the amount of staked Ethereum currently exceeds 85 million, accounting for over 70% of the total supply. ETH holdings on exchanges are also continuously decreasing, leading to projections that the possibility of a long-term supply shortage could increase in the market. In the altcoin market, the first signs of a rebound are appearing after a recent sharp drop of nearly 50% from its peak, but analysis suggests that a lack of liquidity is preventing the entry into a full-fledged altcoin season.

The media also cited the recent passage of the CLARITY Act, a bill on the US cryptocurrency market structure, by the US Senate Banking Committee as a key market variable. However, concerns are growing within the banking sector that the stablecoin profit structure within the bill could lead to outflows from existing bank deposits. At the same time, market interest is growing again as Kevin Warsh, confirmed as the new Federal Reserve (Fed) chairman, evaluated Bitcoin as “an important asset for judging economic conditions” and disclosed his investments in Solana (SOL) and Optimism (OP).

*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.*