Continued selling in the cryptocurrency markets pulled the total market capitalization below $800 billion on Nov. 21. Traders are increasingly nervous about the extent of damage FTX’s collapse may have on several crypto firms. Until the uncertainty clears, it is futile to expect a sustained recovery in cryptocurrency prices.
The FTX saga has broken the close correlation between the United States equities markets and Bitcoin (BTC). While Bitcoin is trading close to its 52-week low, the S&P 500 (SPX) has recovered sharply from its low made on Oct. 13.
Daily cryptocurrency market performance. Source: Coin360
The U.S. dollar index (DXY) is usually inversely correlated to Bitcoin but its recent drop from the multi-year high did not benefit Bitcoin. This suggests that crypto buyers remain on the sidelines