Bitcoin (BTC) held steady near $21,000 on Friday afternoon.
The largest cryptocurrency by market capitalization was recently trading at $21,030, up 3% over the past 24 hours. This weekend, however, could pose another test for bitcoin, analysts say.
“This weekend could be another testing period for the cryptocurrency, despite the resilience shown this week in holding back above such a major level,” Oanda senior market analyst Craig Erlam said. “The support still looks shaky below and another break could see confidence in the space really put to the test.”
Last Friday, bitcoin traded at $20,441. But over the weekend, the cryptocurrency slumped to $17,601 as it faced major selling pressure.
Altcoins continued to outperform bitcoin with axie infinity (AXS) and polygon (MATIC) among the biggest gainers, recently rising more than 16% and 13%, respectively, over the past 24 hours.
Simon Peters, a crypto market analyst at Israeli investment firm eToro, said that increasing risk of a recession and poor corporate earnings could further affect stock prices, which have recently correlated with crypto prices. Negative trends in the traditional market could then be reflected in the crypto market.
“It’s too early to say if bitcoin has stabilized at the $20K level,” Peters said. “Fear has somewhat died down in the crypto markets this week, but it hasn't disappeared completely.”
Traditional markets climbed with the S&P 500 recently up 2.4% and the tech-heavy Nasdaq rising 2.5% after a revision in the University of Michigan’s May monthly consumer sentiment index, which now shows expectations for inflation lower than first reported. It was a faint sign that the U.S. economy may be cooling and that the U.S. central bank may not have to raise interest rates as dramatically as is widely expected.
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