The sell-off in the stocks market saw the risk-off mood joining the crypto space. The market witnessed a sharp decline since movements before Thursday's trading opened, triggering a sudden fall in the cryptocurrency market.
The pessimistic market sentiment saw Bitcoin price on a sharp plunge to levels below $36,000. That triggered a sell-off in the altcoin market. For instance, Dogecoin surrendered 5.4% of its price within 24 hours. Meanwhile, Ethereum and Sandbox crashed by 7.8% and 11.8%, respectively. Ironically, early sessions on Thursday had the asses up about 10% from the lows seen on Wednesday. What a roller-coaster of events?
Though the cryptocurrency market sees a crash, the news associated with the space is optimistic. Congress considers allowing companies to incorporate crypto tokens in 401 (k) plans. And that might attract new investors to the cryptocurrency industry. Also, California declared reevaluating regulations to accept digital assets, according to the recent executive order by Joe Biden.
Moreover, Gucci announced accepting some crypto in its stores by this month's end. The fashion store will start with more than ten tokens, including BTC, ETH, DOGE, and SHIB.
The plunging stock market is dragging crypto prices lower despite the positive news. Also, the tokens' volatility suggests the crypto market magnifies stock market losses in the near term.
The volatility that emerged on Thursday deteriorated the crypto market. Market players can expect wild valuations even as the news favor the market. Moreover, the past six months saw the crypto market increase its correlation with stocks.
As highlighted before, the crypto industry boasts positive news. Retailers introducing crypto payments means increased adoption, and the space has seen more developers joining the bandwagon. That means lucrative developments for the cryptocurrency economy, but it may take time to achieve exponential adoption and developers to create new projects.
Meanwhile, massive sell-offs can be a lucrative opportunity for long-term players to accumulate. Though dip-buying can reflect upcoming trend shifts, it does not mean quick recoveries. It might take weeks, months, or even years for crypto prices to climb back to previous peaks.