The punishment for Bitcoin’s settlement seemed to slow as prices stabilized at around $ 47,000, after the largest cryptocurrency by market capitalization recorded its biggest loss in two days since March 2020, early Tuesday.
- Bitcoin (BTC) is trading around $ 47,851.27 as of 21:00 UTC (4 pm ET). Falling 11.72% in the last 24 hours.
- Bitcoin 24-hour range: $ 44,964.49- $ 55,053.91 (CoinDesk 20)
- BTC is trading below its 10 and 50 hour averages on the hourly chart, a bearish signal for market technicians.
Bitcoin’s price plummeted with U.S. stocks after markets opened in the U.S. on Tuesday, bringing the cryptocurrency’s decline since Sunday to 20%, the two-day high since the coronavirus-fueled crash in March 2020. The decline wiped out more than $ 100 billion of the market value of bitcoin, which last week exceeded $ 1 trillion for the first time.
And while many traders are still optimistic about bitcoin in the long run, analysts said the biggest cryptocurrency may have to fall further in the coming days, traders and analysts said.
As is often the case in the digital asset markets, this week’s decline did not appear to be linked to any specific negative news or fundamental data, but to technical factors such as worrying signs on price charts and a general feeling that the market was going far. too much, too fast: Bitcoin’s price doubled this year to an all-time highest price of more than $ 58,000 on Sunday.
This week’s drop in prices cut 2021 gains by up to 59%, against 3.6% for the Standard & Poor’s 500 US stock index.
“The current market is extremely overheated,” CoinDesk Flex Yang, founder and CEO of Babel Finance, a Hong Kong-based crypto creditor, told CoinDesk. Prices can drop to as much as $ 40,000, he said.
The price movement came with a strong volume, however, indicating high activity on the part of sellers and buyers. Turnover on the eight major exchanges monitored by CoinDesk exceeded $ 10 billion for the second consecutive day.
The signals from the bitcoin derivatives market showed traders getting a little less optimistic, with spot price futures contracts shrinking on major exchanges, including Deribit, Binance, OKEx and Huobi.
Premiums are still high compared to January levels, indicating that bulls still dominate the market.
Arcane Research, a Norwegian cryptocurrency analytics company, noted in its weekly newsletter Tuesday that financing rates – fees that traders pay for leverage – have fallen dramatically since Monday, a sign that part of the market crash this week may have shaken some of the euphoria.
Financing rates for perpetual futures contracts are defined by the market and vary over time, as traders enter and exit positions. When the market is bullish, financing rates become positive and traders who take long positions pay short sellers. When the market is down, financing becomes negative and short sellers pay.
Arcane Research also warned that, with perpetual shares being traded again with a “significant” premium to spot prices on Tuesday, financing rates are expected to rise soon.
“Trying to pick up a falling knife is a dangerous exercise, which can start a new cascade of liquidations in the short term,” wrote Arcane Research.
There appeared to be little change this week in the outlook for loose monetary policy, which has prompted many institutional investors to buy bitcoin as a hedge against eventual inflation. Federal Reserve Chairman Jerome Powell, testifying on Tuesday to the United States Senate Banking Committee, kept his earlier message that easy monetary policy would not change anytime soon, given the need to keep loan rates low as long as necessary for the recovery of the economy.
“We see the current downturn as nothing more than a necessary correction to allow a very strong market to take time to consolidate and redefine before eventually seeking to continue on its upward path,” Joel Kruger, cryptocurrency strategist at institutional cryptocurrency LMAX Digital , said.
And it seems that some are buying the most recent drop, as CoinDesk reported earlier today.
Lower ether; high rates force more settlements on DeFi lending platforms
Ether (ETH), the second largest cryptocurrency by market capitalization, fell on Tuesday, trading around $ 1,524.42 and falling 14.08% in 24 hours from 21:00 UTC (4:00 pm ET).
Similar to bitcoin, ether trading volume on major exchanges exploded again on Tuesday.
As the ether price continued to be corrected, another record $ 115 million in decentralized finance (DeFi) loan positions based on the Ethereum blockchain was eliminated on Tuesday, as reported by CoinDesk.
Read More: DeFi lending platforms settle a record $ 115 million in loans as the price of ETH falls
Other markets
The digital assets at CoinDesk 20 are mostly in red on Tuesday. There were no notable winners at 21:00 UTC (16:00 ET).
- Oil rose 0.45%. Price per barrel of West Texas Intermediate crude: $ 61.98.
- Gold was in the red 0.21% and $ 1,805.15 at the time of this publication.
- Yield on 10-year US Treasury bonds fell on Tuesday, falling to 1.359%.
