Bitcoin and Ethereum Experience Moderate Losses Amidst Market Volatility
Bitcoin and Ethereum experienced moderate losses over the past week due to factors such as the strengthening U.S. dollar, a slowdown in Bitcoin's use for NFTs, and various regulatory developments in the crypto industry.
Introduction
Bitcoin (BTC) and Ethereum (ETH) faced moderate losses over the past week, despite a brief midweek growth spurt following lower-than-expected inflation readings from the U.S. Department of Labor. Bitcoin's value decreased by 7.9%, trading at $26,817, while Ethereum dipped by 5.8% to reach $1,800. The strengthening U.S. dollar played a role in Bitcoin's pullback, as the two typically exhibit an inverse relationship. Additionally, the use of Bitcoin for Ordinals NFTs witnessed a slowdown in trading volume, transaction fees briefly spiked, and several altcoins experienced notable dips in value.
Bitcoin's Performance and Market Factors
Despite the announcement that the Principality of Liechtenstein would soon accept Bitcoin as payment for state services, the largest cryptocurrency by market capitalization recorded larger losses than Ethereum during the week. Bitcoin struggled against the rising U.S. dollar, which impacted its value as the two tend to move inversely. The increasing strength of the dollar over the last two days led to a pullback in Bitcoin's price.
Furthermore, the use of Bitcoin for Ordinals NFTs experienced a decline in trading volume, with a 50% drop on May 11 compared to previous levels in May, as reported by Domo's Dune dashboard. Additionally, Bitcoin transaction fees reached a two-year high on Tuesday, briefly peaking at an average price of $31.14 before dropping back down to under $10.
Ethereum's Performance and Market Trends
Ethereum saw a relatively minor dip of 5.8% over the past week, with its current value at $1,800. In comparison to the broader market, Ethereum's losses remained relatively light during this period.
Altcoin Performance
Several cryptocurrencies experienced significant declines during the week. Polygon (MATIC) fell by 11.5% to $0.856058, Avalanche (AVAX) dropped 11% to $15.01, Toncoin (TON) sank 11.8% to $1.85, and Internet Computer (ICP) experienced a 9.2% drop, trading at $5.16.
Conclusion
Bitcoin and Ethereum faced moderate losses over the past week amidst market volatility. Bitcoin's decline can be attributed, in part,
