Whoever coined the phrase “sell in May and walk away” had brilliant insight and the behavior of the cryptocurrency and equity markets over the last three weeks has shown that the expression still holds true.
May 20th has seen a sell-off across asset classes, leaving traders with little choice to escape the carnage as concerns over inflation and rising interest rates continue to dominate the headlines. .
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin (BTC) price is making waters below $29,000 and traders fear that losing this level will lock them into a drop as low as $20,000 over the next week.
As Cointelegraph reports, some analysts warn that BTC could drop to $22,700, based on its historical price behavior after a cross of death.
Other evidence of the muted expectations of traders can be found in the put/call ratio for BTC open interest, which hit a 12-month high of 0.72 on May 18 according to cryptocurrency research firm Delphi Digital.
DelphiDigital said:
“A high put/call ratio indicates investors are speculating whether Bitcoin will continue to sell off, or it could mean investors are hedging their portfolios against a move lower.”
Stocks enter bearish territory
May 20 brought more pain to traditional markets, as the S&P 500 fell another 1.62%, marking a decline of more than 20% from its January 2022 all-time high and further stoking recession fears. If the index manages to close the day down 20% from its all-time high, this would officially put the benchmark in bearish territory.
The Nasdaq Composite and the Dow have also suffered significant losses amid widespread weakness, with the Nasdaq shedding 275 points for a 2.42% loss, while the Dow has dropped 362 points, marking a 1.28% decline.
What’s bad for BTC is even worse for altcoins
Altcoins also fell sharply as BTC, Ether and stocks fell back; reversing gains seen earlier in the day.
The few tokens that bucked the downtrend were Ellipsis (EPS), Persistence (XPRT) and 0x (ZRX), which gained 30%, 13.92% and 12.34% respectively.
The total cryptocurrency market capitalization currently stands at $1.234 trillion and the dominance ratio of Bitcoin is 44.6%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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