The Start Of A Correction, Or Is Support Already In Play?

Insights into Crypto Market Swings Amidst Economic Data and Investor Sentiment

Crypto market capitalisation is down 1% in 24 hours but has seen a cautious rise from a low of $2.43 trillion to $2.51 trillion since the start of the day on Wednesday. The Cryptocurrency Fear and Greed Index has rolled back to 71 (“Greed”) after over a month of “Extreme Greed”. Technically, this sink looks like an invitation for a deeper dive.

Cryptocurrencies have sold off along with other risk assets. US Treasury yields have risen to their highest levels in months. Markets are scaling back expectations for Fed easing this year after strong economic data. However, a key confirmation or denial is yet to come in the form of Friday’s jobs report.

Bitcoin fell below $65K on Tuesday night and Wednesday morning, where buyers supported it. There’s a combination of the psychologically important round level for retail traders and the 76.4% retracement of the rise from the January lows. This support has not yet translated into a strong rebound, with the price hovering around $66.3K as active trading begins in Europe. Should the sell-off deepen, our focus will be on the ability to hold above $63K.

Crypto News

According to Coinglass, liquidation in the futures market reached $456 million in the last 24 hours (the highest over the last 14 days). The bulk of this – $355 million – came from longs.

The speed of the decline was driven by large liquidations on exchanges such as Binance with many retail traders, causing the funding percentage of open-ended futures to fall from 77% to a low, according to QCP Asia.

According to The Block, bitcoin miners generated a record $2 billion in revenue in March, an all-time high. The volume of commissions in the revenue was $85.81 million. Galaxy Digital estimates that around 15-20% of the total computing power of the Bitcoin network will be unprofitable after being cut in half.

The Wall Street Journal described the Tether stablecoin as an “indispensable” tool for circumventing sanctions. According to the publication, the US Treasury Department is pushing Congress to pass legislation that would allow US regulators to monitor and block transactions involving dollar-linked cryptocurrencies.

by FxPro’s Senior Market Analyst Alex Kuptsikevich