Cryptocurrency Market Sees Decline, Bitcoin Dips Below $62,000
The cryptocurrency market experienced a decline on Wednesday, extending the losses that began earlier in the week. Bitcoin, the world's largest cryptocurrency, dipped below $62,000, resulting in week-to-date losses exceeding 6%. Dogecoin, a popular meme coin, witnessed an even steeper decline, dropping over 14% since the start of the week.
This price drop triggered liquidations worth more than $140 million within a 24-hour timeframe, with nearly $100 million in long positions being wiped out. Interestingly, despite the decline, the number of traders taking bullish long positions on Bitcoin spiked dramatically, exceeding those betting on a price decrease.
The Bitcoin Fear & Greed Index currently indicates "Greed," reflecting a degree of FOMO (fear of missing out) in the market and a potential surge in buying pressure. The global cryptocurrency market cap stands at $2.27 trillion, having declined by 1.34% in the past 24 hours.
Mixed Performance in U.S. Equity Market
The U.S. equity market presented a mixed performance on Wednesday. The Dow Jones Industrial Average rose 0.44%, extending its winning streak to six consecutive sessions. The S&P 500 and the tech-focused Nasdaq Composite, however, experienced slight declines of 0.13% and 0.18%, respectively.
The yield on the 10-year Treasury rose to 4.496% as of 9:23 p.m. EDT.
Bitcoin Undervalued, Alt Season Not Yet Here
According to on-chain analytics firm IntoTheBlock, the correlation between cryptocurrencies and traditional markets, including equities, is currently close to zero. Bitcoin's correlation with the Dow stands at 0.25, while with the S&P 500, it is 0.40. This suggests that both asset classes are currently moving independently.
Popular cryptocurrency trader Elja highlighted that Bitcoin is undervalued relative to its current network fundamentals. He estimates that Bitcoin's top could be somewhere between $250,000 and $275,000, representing a potential 300% gain from its current level.
Another crypto expert, Benjamin Cowen, believes that the market is far from the alt season, where traders typically take profits from Bitcoin and invest them in altcoins. He points to the current macro Bitcoin dominance uptrend as evidence that alt season is not yet upon us.