Bitcoin (BTC) witnessed a major correction in the past two weeks as fell from its all-time high of $64,863 in the previous month to currently where it trades at around $38,000 levels. It hit a low of $30,681 on May 19, reflecting a fall of more than 50 per cent compared to its all-time high a month ago.
Due to this, the market capitalization of Bitcoin also fell significantly this month to approximately $700 billion currently. It is still the most prominent asset among cryptos. On the positive side, the crypto community as well as financial institutions (FIs) and banks continue to keep a bullish stance on the asset. This is the result of banks, MNCs, and in some cases even governments recognising the potential of Bitcoin.
Hence, the sentiment remains positive, and this is fueling the recovery even more as accumulating at these levels seems like an attractive strategy. Furthermore, as companies allocate BTC to their balance sheets, it is a positive reinforcement proving that the asset class is going mainstream rather quickly.
Ethereum too has trended similarly. The second-largest asset by market capitalization, Ethereum (ETH), also witnessed a major correction falling from $4,300 levels to lows of $1,750. Since then though, an upward trend has set in and ETH has gradually come up to $2,900 levels as of now.
Major corrections and profit booking were seen during the month, but the asset has always responded with a recovery almost immediately. ETH saw an average decrease of 40 per cent this month, compared to April. As the Ethereum blockchain fully supports DeFi Apps, Ethereum has gained significant traction among major industries, spiking investors’ interest in Ether.
In addition to that, the blockchain is soon undergoing an upgrade which will result in token burns, limiting the ETH supply in the long run, and this is likely to result in an upward price pressure of the asset, and hence a reason to watch out and maintain a bullish stance.
On the technical side, Bitcoin (BTC) has been on a downtrend over the past two weeks. However, this week, the asset showed signs of recovery and surged almost 36 per cent to the weekly high of $40,900. The asset is consolidating and trading in a range from $36,400 to $40,500. Breakouts on either side with good volumes will further decide the trend. BTC can face some stiff resistance at $42,500.
Ethereum (ETH), post making the low of $1,755, witnessed a sharp recovery and prices have surged almost 66 per cent making a weekly high at $2,915. The bulls, however, have failed to manage a grip on the asset and were not able to break the resistance of $2,981, and hence prices have retraced from these levels. $2,495 should act as a crucial support level and if prices fail to hold these levels we may see more downside movement. ETH, to further rally, needs to break and sustain above the $3,000 mark.
Lastly, the next couple of days are crucial for both BTC and ETH, as most analysts and investors are expecting a recovery to play out. Though volatility seems to be a given, fundamentally, BTC and ETH, the largest assets by market capitalization, continue to hold a strong footing in the marketplace. Hence, we remain bullish on both BTC as well as ETH and feel positively towards the larger and more prominent altcoins, especially those operating in the DeFi ecosystem.
Crypto Prices as of 12.40 hours IST on May 30, 2021 (Source: coinmarketcap.com)
Top 5 gainers during the week:
- Polygon: 68.23 per cent
- Bakery Token: 51.11 per cent
- Helium: 38.13 per cent
- Decdred: 2872 per cent
- Enjin Coin: 28.28 per cent
Top 5 losers during the week:
- Internet Computer: 26.94 per cent
- Synthetix: 23.5 per cent
- Waves: 22.22 per cent
- Revain: 14.61 per cent
- Algorand: 12.71 per cent