Crypto markets slid 2.6% in the past 24 hours amid renewed global recession fears

The crypto market has dropped 2.6% in the past 24 hours amid fears of a new global recession. Shares in Europe and Asia inched lower while reports of possible global supply chain disruptions continued to captivate markets as fresh Chinese shutdowns dragged on for another week.

Terra (LUNA) leads slide in majors as Ether nears $3,000

In Asia, Hong Kong’s Hang Seng index ended the day down 3%, while the Shanghai Composite fell 2.61%. In Europe, Germany’s DAX fell 0.31%, and the pan-European stock index Stoxx 600 lost 0.20%. Traders started pricing in the downside in the US as pre-market futures for Nasdaq fell 0.67%, while the S&P 500 fell 0.31%.

The upbeat sentiment in the global markets spreads to the crypto market. Terra’s LUNA, Avalanche’s AVAX, and ether (ETH) have seen the most significant declines in the past 24 hours outside of bitcoin in the top ten cryptocurrencies by market capitalization. During the European morning hours, ether fell to just above key support at $3,000, a loss of which could cause the asset to slide deeper towards the $2,700 mark.


ETH dropped to the critical support at $3,000 | Source: TradingView

LUNA dropped 8% even as Luna Foundation Guard (LFG) added $173 million in bitcoin to its wallet over the weekend, bringing its total holdings to 40,000 bitcoins. LFG is a newly established nonprofit that aims to sustain the Terra ecosystem by building a $10 billion reserve of bitcoin to support UST, a stablecoin issued by Terra, one of the main supporters of the LFG.

Price charts show that LUNA fell to previous support at $85 nearly a week after establishing a lifetime high of $120. A loss of current levels could drop further to the $70 mark, where the next significant support exists.


LUNA dropped to the previous support at $85 | Source: TradingView

Cryptocurrency market capitalization dropped to just over $2 trillion, down about $260 billion from last week’s $2.27 trillion. Bitcoin fell to $41,300 during European morning hours, down 10% from last week’s $48,100 mark, a three-month high.

Figures from earlier this month show Bitcoin ended the first quarter of 2022 trading at a correlation of 0.9 with the S&P, where 1 indicates a perfect correlation and -1 is a complete reversal. The 90-day correlation between bitcoin and the S&P previously established a 17-month high in March.

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