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Terra’s LUNA Leads Slide in Majors as Ether Nears $3K

source-logo  coindesk.com 11 April 2022 12:27, UTC

Crypto markets slid 2.6% in the past 24 hours amid renewed global recession fears, data shows. Stocks in Europe and Asia inched lower, while reports of potential global supply chain disruptions further gripped markets as China’s renewed lockdowns extended to another week.

In Asia, Hong Kong’s Hang Seng Index ended the day 3% lower, while Shanghai Composite took a 2.61% loss. Over in Europe, Germany’s DAX slid 0.31% and the pan-European stock index Stoxx 600 lost 0.20%. Traders started to price in bearish movement in the US as pre-market futures for Nasdaq dropped 0.67%, while the S&P 500 fell 0.31%.

Bearish sentiment in global markets spread to crypto markets. Terra’s LUNA, Avalanche’s AVAX, and ether (ETH) saw the biggest declines in the past 24 hours outside of bitcoin in the top ten cryptocurrencies by market capitalization. In European morning hours, ether dropped to just over a major support level at $3,000, losing which could see the asset slide further to the $2,700 mark.

Crypto market capitalization fell to just over $2 trillion, dropping some $260 billion since last week’s $2.27 trillion figure. Bitcoin fell to $41,300 in European morning hours, a 10% decline since last week’s $48,100 mark, a three-month high.

Rising correlation with stocks

Some analysts said recent price action proved the crypto market’s correlation with stocks was rising.

“The crypto market is again increasing its correlation with the dynamics of stocks, or rather, it is guided by the high-tech Nasdaq index,” explained Alex Kuptsikevich, financial analyst at FxPro, in an email to CoinDesk. “This relationship is easily explained by the fact that in both cases, investors are betting on a progressive idea.”

Metrics from earlier this month showed bitcoin ended the first quarter of 2022 trading at a correlation of 0.9 with S&P, where 1 suggests perfect correlation and -1 is perfectly inverted. The 90-day correlation between bitcoin and S&P previously set a 17-month high in March.

coindesk.com