Bitcoin was hectic throughout the period, with two dips below $29,000. The week's highest high — $30,684.40 on Tuesday, May 17 — was followed by the lowest low of $28,772.20 on Thursday, May 19.
The Fear & Greed Index showed persistent extreme fear. While macro and geopolitical uncertainties remained, the market echoed the stock downturn. On Friday, May 20, BTC resumed falling while S&P 500 slid to over 20% below its peak.
As of now, BTC is trading at $29,201.47, with a 24-hour slip of -2.6% and a 7-day change of -6.8%.
ETH showed the same choppy dynamics as it see-sawed between the extremes – $2,110.55 on Tuesday, May 17, and $1,915.18 on Thursday, May 19. The ensuing feeble recovery gained strength on Monday, May 23, until another sharp collapse.
In total, the second-biggest cryptocurrency lost 0.5% more than BTC. It is now headed downward as the aversion to risk remains.
As of this writing, ETH is trading at $1,990.50, with a 24-hour change of -1% and a 7-day plunge of -7.3%.
Ripple saw similar ups and downs with a delayed peak – $0.439214 on Wednesday, May 18. The next day, its price crashed to $0.401738, followed by fickleness that mirrored BTC and ETH. XRP was the biggest loser as it fell by over 8% in total.
A lack of progress in the SEC vs. Ripple case hinders the coin. Investors are looking forward to a ruling on an SEC brief related to William Hinman’s 2018 speech. In it, the former SEC Director of the Division of Corporation Finance characterized BTC and ETH as non-securities.
As of now, XRP is trading at $0.411049, with a 24-hour dip of -1.6% and a 7-day slide of -8.3%.
Ethereum’s transition to Proof-of-Stake expected in August
Ethereum may complete its much-awaited transition to Proof-of-Stake (the merger of the ETH 1.0 and ETH 2.0 chains) in the near future. In a panel talk at the Permissionless conference, its developers unveiled plans to break away from Proof-of-Work sometime in August.
Justin Drake, the Ethereum researcher, acknowledged a “strong desire to make this [The Merge] happen before difficulty bomb in August.” Preston Van Loon, the Ethereum core developer, expressed the same opinion but noted that if the difficulty bomb needs rescheduling, it will influence the timescale. This component is critical for Ethereum 2.0 as it must spur PoS adoption and ensure the same level of services throughout the transition.
Like Bitcoin, Ethereum currently relies on PoW, a protocol requiring massive computing resources. The bomb, when it goes off, will make the puzzles for miners increasingly difficult. Eventually, it should bring about an Ice Age, where the PoW chain will cease producing blocks. The Merge was initially scheduled for June 2022.
If everything goes according to plan, Ethereum will have one final milestone to reach – the Sharded Chain upgrade slated for early 2023. Otherwise, it may need an additional update to defer the difficulty bomb, according to Ethereum developer Tim Beiko. The launch of Ethereum 2.0, a superior, more efficient, and sustainable version of the blockchain, could become a watershed moment for the altcoin market.
S&P 500 drops 20%, dragging Bitcoin and altcoins down
Over the past three weeks, Bitcoin and altcoins have shown a strong correlation with stocks. On Friday, May 20, S&P 500 was over 20% below its intraday record, hinting at new lows amid mounting fears of inflation and recession. All asset classes echoed the sentiment as they experienced sell-offs.
While BTC dipped below $29,000, S&P 500 plunged into a bear market, albeit briefly. The index also completed its seven-week losing streak, the longest since March 2001. The Nasdaq Composite and Dow are also down this year — by over 28% and 15%, respectively. The former has been in the red the longest, as tech stocks have led to market declines.
Some crypto investors warn that BTC could revisit the low $20,000s in the near future. Its historical price performance after a death cross makes these concerns justified. According to Rekt Capital, the coin could fall to $22,700. What’s more, on May 18, the put/call ratio for open interest soared to a 12-month high of 0.72, which could indicate that the market bottom is near.
Inflationary pressures and rising rates are still whipsawing investors. Like Bitcoin, altcoins are selling off. On the upside, the crypto market cap has rebounded to $1,262 trillion from under $1.2 trillion on May 12.
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