As a seasoned financial analyst with extensive experience in the crypto market, I’m deeply concerned about the recent turn of events. The global crypto market cap has plummeted 20% to a low of $2.15 trillion today, and Bitcoin price hit a 24-hour low of $57,800. This is a stark reminder that the crypto market is subject to significant volatility and risk.
The crypto market has shifted back into a bearish trend with the global cryptocurrency market capitalization dipping to $2.15 trillion – a 20% decrease from its previous value. This downturn represents a decline of over 4.2% within the past day. The price of Bitcoin reached a low of $57,800 in the last 24 hours, nearing a crucial support level that could potentially lead to a further slide down to $52,000.
In the past 24 hours, there was a significant decline of over 5% for altcoins such as Ethereum, Binance Coin, Cardano, XRP, and Toncoin. Conversely, tokens from the Solana ecosystem, meme coins, and certain AI projects experienced a drop of more than 10%.
The mood in the cryptocurrency market has shifted to fear once again, as investors frantically sell off their holdings before the upcoming $10 billion repayment process begins at Mt. Gox this week. Financial institutions like JPMorgan and CoinShares have issued warnings of a potential market upheaval due to the anticipated selling pressure from creditors.
Crypto Market Officially In Bear Market
According to CoinGlass, approximately $300 million in cryptocurrencies were sold off in the past 24 hours due to market movements. Over 102,000 traders experienced liquidations during this period. The largest single liquidation order took place on OKX exchange, where someone converted Ethereum into USD valued at around $4 million.
As a crypto investor, I’ve witnessed a significant liquidation event within the past 24 hours. Approximately $250 million worth of long positions and $50 million in short positions were forcedly closed. The market’s downturn has resulted in staggering losses for investors, totaling over $90 billion. Consequently, the overall crypto market capitalization has plummeted from a towering $2.24 trillion to a more humble $2.15 trillion.
Approximately 17,500 Bitcoin options, equivalent to a notional value of $1.02 billion, are due to expire. The put-call ratio stands at 0.76. This implies that for every seven call options (buy), there are six put options (sell). The maximum price at which these contracts will experience no loss is currently set at $62,500. With Bitcoin dipping below the $59k mark today, market sentiment suggests continued selling pressure on the cryptocurrency.
Significantly, the put-to-call ratio in the previous 24 hours surpassed 1.09, representing a substantial increase in put option activity. Specifically, there were over 17,200 put options traded against approximately 15,793 call options. This pattern implies that options traders have adopted a predominantly bearish stance towards Bitcoin.
The decrease in implied volatility (IV) across the board indicates that the Bitcoin market may experience a steep drop if there’s an unexpected price fluctuation, potentially pushing the price under $70,000.
Macro Impacts Continue To Build Up
The most recent speech from Federal Reserve Chair Jerome Powell and the FOMC Minutes release indicated a firm position among Fed officials against reducing interest rates this year. However, the ongoing presidential election, with Donald Trump currently in the lead after the latest debate, is adding to their deliberations. They are keeping a close eye on developing information regarding US inflation and employment trends.
As an analyst, I’d interpret the CME FedWatch signal as indicating a likelihood of two rate reductions in the current year based on the recent market trends. Specifically, the odds of a 25 basis point cut in September have grown significantly from 59% to 66.5%. The weaker-than-expected US economic data has fueled these expectations for Fed interest rate cuts.
The DXY, or US dollar index, remained near 105.3 on Thursday following a three-week low hit in the previous session. Concurrently, the yield on the 10-year US Treasury note retreated to 4.35% in response to the latest ISM and employment reports, indicating a decelerating labor market.
As a researcher studying the cryptocurrency market, I’ve noticed analysts predicting that a market rebound could occur at any moment. Shorting Bitcoin and altcoins, therefore, may not be the best decision given this potential market reversal. Instead, it seems that the market will undergo consolidation near its current level before experiencing a rebound above $61k by the end of the week.
An on-chain expert has remarked that a decrease in USDT (Tether) liquidity won’t trigger Bitcoin (BTC) expansion; instead, Bitcoin’s growth will signal the need for buying more coins.
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2024-07-04 11:18