27.06.202314:21 Forex Analysis & Reviews: Bitcoin trims early losses

The world's biggest cryptocurrency kicked off Tuesday morning with gains. At the time of preparing this article, BTC is trading at $30,370.

According to CoinMarketCap, which tracks the quotes of virtual assets, Bitcoin's highest price reached $30,636 in the past 24 hours, while the lowest one was $29,955.

Strong bearish sentiment prevailed in the cryptocurrency market the day before. As a result, the price of BTC dropped by 0.49% to settle at $30,250 on Monday.

The key pressure factor on leading digital coins was pessimism in the US stock market observed the day before. The Dow Jones Industrial Average fell by 0.04%, the S&P 500 index lost 0.45%, and the NASDAQ Composite plunged by 1.16% at the end of the previous trading session.

Experts note that the correlation between the cryptocurrency and stock markets has become progressively weaker this year amid Bitcoin's ongoing sideways move.

This was reported by analysts from US investment company Bernstein in late February. Last month, the correlation between Bitcoin and the tech-oriented NASDAQ index fell to 0.58 from 0.94.

According to Bernstein experts, the cryptocurrency market is currently balancing between bullish and bearish trends while awaiting further driving factors. At the same time, its vulnerability to important news releases and events in the financial world has significantly decreased.

Notably, in early 2022, analysts often emphasized the increased correlation between the US stock market and the virtual asset market amid tense expectations regarding the effects of the geopolitical conflict in Eastern Europe and the Federal Reserve's further steps. In the middle of last year, experts from investment firm Arcane Research stated that the correlation between BTC and tech stocks had climbed to its highest point since July 2020.

Meanwhile, economists from TradingView said that the correlation between the cryptocurrency market and the US stock market was 70% in the fourth quarter of 2022.

Altcoins

Ethereum, the main competitor to BTC, also kicked off Tuesday on a positive note. At the time of writing this article, the asset is trading at $1,874. On Monday, the cryptocurrency dropped by 1.95% to close at $1,853. As for analysts' forecasts, the future trend of the altcoin will depend on whether the coin drops below $1,600 or rises above $1,950.

Among the top 10 cryptocurrencies by market capitalization in the past 24 hours, Solana was the worst performer (-1.82%), while Tron showed the best result (+2.38%).

Last week, Bitcoin topped the list of ten best-performing cryptocurrencies (+12.97%), while XRP suffered losses (-2.13%).

According to CoinGecko, the world's largest cryptocurrency data aggregator, in the past 24 hours, Bitcoin Cash took the lead in the list of gainers (+13.62%) among the top 100 most capitalized digital assets, while BitDAO headed the list of losers (-5.06%).

Last week, the best performer among the top 100 strongest cryptocurrencies was Bitcoin Cash (+108.96%), while Sui showed the worst result (-6.19%).

Data from CoinGecko showed that the total market capitalization of cryptocurrencies is currently above the key level of $1 trillion, standing at $1.142 trillion as of Tuesday morning. This figure increased by 0.52% in the past 24 hours.

Since reaching its peak above $3 trillion in 2021, the market capitalization of the cryptocurrency market has lost about $2 trillion.

Traditionally, June is considered a favorable period for BTC. Over the past 12 years, the digital currency has ended this month with gains in seven cases and losses in five cases. The average gain in June is 16.7%, while the average loss is 19.2%. If Bitcoin repeats the dynamics of previous years this month, it may rise above the April high to $31,600 or drop to $21,900.

In May, the first cryptocurrency slid by 7.6% and closed the month at $27,100. In April, BTC lost nearly 10%. In March, the coin skyrocketed by 22.6%, marking the third consecutive month of gains as the banking sector meltdown eased.

Bitcoin ended February with an advance of 0.9%, reaching $23,200. In the first month of 2023, it gained nearly 40%, making January its best month since October 2021. Notably, the January-March period of the current year proved to be the best quarter for the coin since the beginning of 2021, with BTC becoming one of the most profitable assets.

The main driving force behind gains in the digital currency market since the beginning of 2023 has been an impending crisis in the traditional financial market. Securities and bonds are currently going through a rather challenging period. That is why investors are increasingly keen to invest in virtual currencies.