As a researcher with experience in the crypto market, I find the recent downturn in Bitcoin and cryptocurrency prices alarming. The market cap has shrunk significantly from $2.34 trillion to $2.20 trillion, causing investors to lose another $150 billion after a massive $250 billion liquidation in the last few days. I’ve closely monitored the Bitcoin price plunge to a low of $59,120 on Wednesday, down 6% over 24 hours and 11% in a week. Ethereum and other altcoins such as Solana (SOL), XRP, Toncoin (TON), Cardano (ADA), and even meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) have also suffered significant losses.
The grip of crypto market bulls weakened significantly as the total value of the crypto market plummeted from $2.34 trillion to $2.20 trillion within a few days, resulting in an additional $150 billion loss for investors following a substantial $250 billion worth of liquidations. The price of Bitcoin dipped as low as $59,120 on Wednesday, representing a 6% decrease over the past 24 hours and a 12% decline in just one week. Traders are expecting the Bitcoin price to potentially fall even further, perhaps reaching the $47,000 mark.
As an analyst, I’ve observed a significant decrease in Ethereum‘s price, which dropped more than 6% to reach a low of $2,918 within the last 24 hours. Similarly, other cryptocurrencies like Solana (SOL), XRP, Toncoin (TON), and Cardano (ADA) experienced declines between 5-10%. The downward trend affected meme coins Dogecoin (DOGE) and Shiba Inu (SHIB) more severely, with both experiencing over 9% drops.
The attitude towards cryptocurrencies on the market has deteriorated, with the Crypto Fear & Greed Index dropping from 67 (indicating greed) to 54 (representing neutral sentiment) within the past day.
Why Bitcoin and Crypto Prices Are Falling Today?
The prices of Bitcoin and cryptocurrencies plummeted due to widespread selling as investors grew anxious about the possibility of prolonged higher U.S. interest rates before the upcoming Federal Reserve policy announcement on May 1st. Despite initial expectations that the Fed would maintain its current interest rate range of 5.25%-5.50%, Chair Jerome Powell could signal a shift towards fewer interest rate reductions in 2023, as opposed to the previously anticipated three cuts.
As an analyst, I’ve examined the latest PCE data, which revealed enduring inflationary pressures. Furthermore, the modest 1.6% growth rate in Q1 GDP hinted at stagflation. Prediction markets anticipate only a single Federal Reserve rate reduction in 2023, leading to a correction in the crypto market.
As an analyst, I’ve observed that the US dollar index (DXY) has advanced to a new peak of 106.45, moving steadily towards six-month highs. Simultaneously, the yield on the US 10-year Treasury bond (US10Y) has surged, reaching 4.688%. The escalating numbers suggest that inflationary pressures are intensifying, which could negatively impact Bitcoin’s price. Anticipation is growing among traders for the Q2 2024 Treasury refunding announcement, as it may potentially bring some relief to Bitcoin’s value.
No Support From Bitcoin ETFs
In simpler terms, the American Bitcoin ETF experienced a failure to attract support and saw outflows totaling $161 million last Tuesday, following a significant market correction on Wall Street. This marks the fifth consecutive day of outflows in the US Bitcoin ETF market. In contrast, Hong Kong’s six spot Bitcoin and Ethereum ETFs had a trading volume of just $12 million on their first day, which is 383 times less than that of US Bitcoin ETFs when they were launched.
It appears that institutional investors have given up on the Bitcoin Exchange-Traded Fund (ETF) for now, and may choose not to invest until there are some promising advancements.
As a researcher studying the crypto market, I’ve discovered that over $435 million worth of positions were liquidated during the recent selloff. Specifically, approximately $383 million in long positions and around $52 million in short positions were terminated due to price movements against their holders.
As a crypto investor, I’d put it this way: Around 139,000 traders had their positions closed forcefully, and the largest of these liquidations occurred on OKX exchange. Someone converted their ETH into USD, amounting to approximately $6.07 million.
Analysts Predicts Fall to Higher $40K Levels
Expert cryptocurrency analyst Michael van de Poppe anticipates that Bitcoin’s price correction has reached its conclusion, potentially leading to a decrease in value to around $56-58 thousand. He further explained, “We’ve already experienced a 20% drop from the peak prices, so we should brace for more declines in the near term.”
Seasoned trader Peter Brand expresses pessimism towards Bitcoin’s price. According to him, the digital currency’s value has peaked, and its graph resembles a descending triangle – a bearish pattern suggesting a potential decrease in value until it breaks. He anticipates a downturn reaching $47-49K before the bull market recovers, continuing until 2025.
Perhaps dip into high 40s, then bull resumes
— Peter Brandt (@PeterLBrandt) May 1, 2024
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2024-05-01 11:02