[Bitcoin Now] US Stock Market and Bargain Buying Drive Uptrend... Investor Sentiment Still at 'Extreme Fear'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Following the optimistic economic indicators that led to a rise in the U.S. stock market, the price of Bitcoin, the leading cryptocurrency, is showing an upward trend despite the aftermath of the Luna incident.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:31 a.m. on the 18th, the price of Bitcoin was $30,350 (approximately 38.55 million KRW), up 1.12% compared to the previous day.

Bitcoin prices rose as the U.S. stock market, which tends to move in sync, climbed. On the 17th (local time), the Nasdaq index, centered on technology stocks, closed at 11,984.52, up 321.73 points (2.76%). The Dow Jones Industrial Average rose 431.17 points (1.34%) to 32,654.59, and the S&P 500 index, focused on large-cap stocks, ended at 4,088.85, up 80.84 points (2.02%). Economic indicators such as April retail sales, which increased by 8.2% year-on-year and 0.9% month-on-month as announced by the U.S. Department of Commerce, led the stock market's upward momentum.

Additionally, as volatility increased due to the Luna crash incident, some bargain buying appears to be occurring. Earlier, as the value of TerraUSD (UST) declined, the price of its sister coin Luna began to plummet. Subsequently, investment sentiment in the cryptocurrency market weakened, causing Bitcoin prices to also plunge sharply. UST is a stablecoin designed to peg its value at $1 per coin. Most of the assets backing UST's value are Luna, but as UST's price fell below $1, Luna's price also plummeted, creating a vicious cycle of declines for both UST and Luna.

Despite the rise in Bitcoin prices on this day, the outlook is not very bright. Tim Frost, CEO of the digital asset management platform Yield App, evaluated, "The crash of UST marked the end of a massive buying spree." Alex Kuptsikevich of FxPro stated, "Since the fundamentals are currently stagnant, there is little reason to argue that the current buying momentum will be prolonged."

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investment sentiment toward cryptocurrencies, rose by 4 points from the previous day to 12 points (extreme fear). Alternative's Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investment, to 100 points, indicating optimism.