Has the Bitcoin Bull Market Ended as BTC Falls Below 60K and MicroStrategy Plummets by 17% amid a Lack of Speculative Buzz?
Bitcoin (BTC) broke through the 60,000 resistance level at 3 a.m. on May 1st, reaching a low of 59,191. The 7-day decline was nearly 10%. Several Bitcoin-related topics did not bring about the desired price increase for Bitcoin. At the same time, Ethereum (ETH) also fell, breaking through the 3,000 support level. The negative evaluation of EigenLayer’s token issuance further added uncertainty to the already inflated derivative market created by collateralized products.
The ETF market has calmed down, and the launch of Bitcoin and Ethereum spot ETFs in Hong Kong on April 30th did not have the expected effect. The total trading volume on the first day was only slightly over 12 million US dollars, far from the volume of US ETFs. The first day of trading did not boost the price of Bitcoin.
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There is concern about inflation, which has led to a decline in the US stock market. The Dow Jones Industrial Average fell by 300 points due to worries about wage growth and the market’s uncertainty about the Federal Reserve’s interest rate decision on Wednesday. MicroStrategy (MSTR) also experienced a significant drop of 17%.
Since Bitcoin’s fall from its all-time high, the difference between MicroStrategy’s Bitcoin holdings and its stock market value has been a topic of discussion. Founder Michael Saylor’s stock selling plan and the downgrading of MSTR’s target price by brokerage firms indicate the current instability of MicroStrategy’s stock price.
Although the Bitcoin ecosystem has various Layer 2, sidechain, inscription, and rune simulation smart contract public chain topics, which have raised Bitcoin transaction fees and increased miner revenue, these funds are mainly circulating within the cryptocurrency community. They do not have the same impact as new external funds flowing into US stock ETFs, and therefore may not have a long-term influence on Bitcoin prices.
The launch of EigenLayer’s token issuance project has revealed the bubble in the LRT market. The token EIGEN is currently only available through airdrops and is not yet in circulation. The LRT protocol’s airdrop is also scheduled for the second phase, which has resulted in many liquidity mining protocols being excluded. The derivative protocol Pendle, which uses yield tokens (YT), has allowed users to speculate on airdrop expectations at a lower cost. After the announcement of the EigenLayer project, the price of YT tokens has plummeted, creating more uncertainty for speculators.
In addition, the launch of the Renzo (REZ) token in the LRT protocol has been a failure, with the token continuously plummeting in value, further undermining the value of tokens related to collateralized protocols.
While EigenLayer has a promising future in terms of applications, whether the token price can meet market expectations is gradually approaching reality, leading to significant adjustments in collateralized token prices.
The previous bull market heavily relied on quantitative easing in the overall economy, which in turn drove topics such as DeFi, NFTs, and P2E. In the current bull market, the introduction of external funds through Bitcoin ETFs is currently the only significant source, and overall economic factors are still not favorable for speculative markets. Although there are various topics brewing within the cryptocurrency community, at best, it can only be considered a Bitcoin bull market, and other competing cryptocurrencies do not have favorable external funds.
After the positive expectations for Bitcoin have reached their bottom, the speculative topics surrounding other cryptocurrencies have also dried up recently.
