Wednesday, December 6, 2023

Stocks And Crypto Dip Ahead Of Historically Strong May

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Stocks and crypto dip ahead of historically strong May but BTC is lagging equities and gold so far the returns are often positive in May so let’s read more today in our latest cryptocurrency news today.

Bitcoin declined from a high of $40,200 during the New York trading day and tracked losses in stocks. Most alternative cryptocurrencies underperformed BTC and indicated a lower appetite for risk among traders, for example, ETH was down by 5% over the past day compared to a 4% dip in BTC and  6% drop in AVAX token over the same time frame.

The stocks and crypto dip and the S&P 500 traded lower on Friday and it is on track for the worst start to a year since 1942 at the same time, the gold prices went higher over the past day and maintained a 6% advance over the past six months. BTC is underperforming the S&P 500 year to date but it is ahead of the long-term Treasury bonds as shown in the charts and there has also been a persistent risk-off theme so far this year because of the geopolitical and macroeconomic risks.

crypto trading
Crypto Derivatives Trading Volume. Source CryptoCompare

The investors reduce their exposure to speculative assets like stocks and cryptos in times of uncertainty and bond returns fall when the rates rise. On the contrary, gold and other commodities outperform when inflation rises. BTC traded in a choppy range in the past year with a midpoint at $40,000 but despite the negative year-to-date returns, the crypto is still up 16% from the January low around $33,000 compared to the S&P500 which is trading lower so far.

DOGE’s token outperformed the market after experiencing a 20% rally and the move was driven by Twitter’s acceptance of the takeover bid from Tesla CEO Elon Musk. The dog-themed meme coin erased most of the gains in the past few days but it was still ahead of the SHIB token’s 18% loss over the past 30 days. ETC is the native crypto of Ethereum Classic, as a blockchain proejct that was created in 2016 when ETH blockchain split into two separate chains, it was the worst-performing crypto after fell from the top spot in March.

crypto market
Cryptocurrency Market Overview. Source Quantify Crypto

In the meantime, BTC and eTH Experienced less selling pressure than other coins in April, and often altcoins underperform in down markets because of the bigger risk profile relative to BTC which suggests a lower appetite for risk among crypto traders. Bitcoin generated an average return of 17% in May and the Stocks are tradign in a seasonally strong period which can provide an opportunity for the buyers to enter the marekt after months of sideways trading.

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