Doom and gloom continued for the broader crypto market over the past weekend following last Wednesday’s sudden crash sparked by the Fed hiking interest rates.
Terra FUD Attack Increases Crypto Market Volatility
Per data from the Bitstamp exchange, the bitcoin price momentarily slipped below $34,200 on May 8 after bulls failed to cling to the support at $36k.
Meanwhile, liquidations escalated as diminishing retail demand and negative market sentiment prevailed following a bloody week in the US stocks market. The latest statistics from on-chain analytics platform Coinglass point to BTC and ETH liquidations approaching $80 million in the past 24 hours.
At press time, the world’s first crypto has bounced back slightly and is now circling the $34.4k lows. Meanwhile, the ETH price is down over 6% to change hands just above the $2,500 mark, per data from coinmarketcap.
Other factors continue to exacerbate the downfall of virtual assets besides the recent interest rate hike that threw the crypto and traditional markets into chaos.
The current BTC downside momentum comes amid bearish reports of a coordinated $285 million FUD attack on the blockchain network Terra and its LUNA native token and UST stablecoin.
Although crypto analyst Michaël van de Poppe categorized the Sunday attack as a FUD, he admitted that it could play a role in bitcoin’s ongoing price dip.
In addition, some of the world’s leading cryptocurrencies, including Ether, Solana, AVAX, and DOT, have slipped by more than 5% on the daily chart. Meanwhile, LUNA has registered double-digit losses since rumors of the Terra attack surfaced on social media.
The recent market developments prompted trader Credible Crypto to revise his earlier prediction indicating that bulls would hold on to the $34.4k low and spark a rally toward $40k. In his latest forecast, the respected analyst sees the BTC price crashing toward $29k, which would mark a new 2022 low for the king coin.
“Lows at 34.4k almost taken, so eyes now on a flush into 29-32k along with filling that finex whale’s bids,” the pseudonymous analyst tweeted.
BTC Approaching Sixth Consecutive Red Weekly Candle
Last week’s retracement wiped out over $100 billion from the total crypto market valuation in just minutes. Although altcoins suffered the most as weak retail demand dominated the space, BTC also endured a brutal beating as dip buyers preferred to stay on the sidelines.
Since the start of the current mini-bear market, bitcoin has logged four straight red weekly closes, marking the worst trading period since the Black Thursday crash in 2020. Last week’s market collapse now threatens to put Satoshi’s invention in a situation that has only happened once before in the cryptocurrency’s history.
In a May 7 Tweet, crypto market expert Michaël van de Poppe highlighted that BTC/USD was close to printing six consecutive weekly red candles for the first time since 2014. The weekly timeframes data paints a dismal short-term outlook for the crypto sector amid decreasing investor appetite for the promising but highly volatile assets class.