Americas Crypto Market Update: Shift to Riskier Assets Impacts Bitcoin and Ether

By Francisco Rodrigues (all times Eastern Time unless otherwise stated) Over the past 24 hours, the cryptocurrency market experienced a downturn, driven by declines in major cryptocurrencies as retail investors transitioned from large-cap tokens to smaller, more speculative assets. Bitcoin and ether dropped approximately 2%, while the CoinDesk 20 Index (CD20), a broad market indicator, fell 2.7%. "We've seen a significant increase in retail participation over the past week, reinforcing the narrative of rising optimism," said Jake O., an over-the-counter trader at Wintermute. "The shift towards riskier assets is most evident in retail screen flows." In contrast, institutional investors have adopted a more cautious approach, continuing to accumulate bitcoin, ether, and XRP, while reducing their positions in solana, which has faced sustained pressure. "Some investors view the underperformance of solana as an opportunity to position for potential gains," Jake noted, pointing to steady buying in solana call options for June and July. Other options activity suggests traders are preparing for potential volatility. Call spreads on ether were unwound, and some traders adopted collar structures, indicating caution after recent gains. The growing hedging activity adds a note of caution to the retail sector's shift towards speculation. Economic uncertainty, lingering inflation pressures, and U.S. tariff policies are weighing on risk appetite in both crypto and traditional markets. Global asset managers currently have their largest underweight position in the U.S. dollar in 19 years. Despite President Donald Trump securing a major investment deal with Qatar and a temporary reduction in U.S.-China tariffs, these outcomes may lead to further downside. Spanish bank Bankinter noted that the market has shown fatigue over the last trading session. "We believe the damage is done: both earnings and prices should feel the strain, with rising inflationary pressures preventing the Fed from cutting rates as much as the market expects," the bank's analysts wrote. Market participants are now focusing on producer price inflation and retail sales data, as well as Fed Chair Jerome Powell's speech later today. For the crypto market, a re-test of the all-time high is still possible. "Looking ahead, we believe there is further room for digital assets to rally, especially as Coinbase's inclusion into the S&P 500 on May 19 approaches," Singapore-based QCP Capital wrote. Stay alert! Key Events to Watch Token Events Conferences CoinDesk's Consensus is taking place in Toronto on May 14-16. Use code DAYBOOK to save 15% on passes. Derivatives Positioning Market Movements Bitcoin Stats Technical Analysis Crypto Equities ETF Flows Spot BTC ETFs: Spot ETH ETFs Source: Farside Investors Overnight Flows Chart of the Day While You Were Sleeping In the Ether