Bitcoin penalties have apparently declined as prices have fallen by about $ 47,000, after the largest cryptocurrency according to market capitalization recorded its strongest two-day loss since March 2020 early Tuesday.
- Bitcoin (BTC) trades at $ 47,851.27 from 21:00 UTC (16:00 ET). With 11.72% over the previous 24 hours.
- Bitcoin’s 24-Hour Range: $ 44,964.49- $ 55,053.91 (CoinDesk 20)
- BTC trades below the average of 10 hours and 50 hours on the hourly chart, a bearish signal for market technicians.
Bitcoin’s price tumbled along with US equities after markets opened in the US on Tuesday, bringing the cryptocurrency’s decline to 20% since Sunday, the largest for a two-day period since the collapse that was fueled by coronavirus in March 2020. The decline wiped out more than $ 100 billion of bitcoin’s market value, climbing past $ 1 billion for the first time last week.
And while many traders in the long run still have a bit on bitcoin, analysts have said that the largest cryptocurrency will have to fall further in the coming days, traders and analysts said.
As usual in digital asset markets, this week’s decline was not linked to specific negative news or fundamental data, but to technical factors such as worrying signals from price charts and a general idea that the market has gone too far. too fast: the price of Bitcoin has doubled this year to a high price of more than $ 58,000 as of Sunday.
This week’s price attack cut the 2021 rise to 59%, from 3.6% for the Standard & Poor’s 500 US equities index.
“The current market is extremely overheated,” Flex Yang, founder and CEO of Hong Kong crypto lender Babel Finance, told CoinDesk. Prices could drop as low as $ 40,000, he said.
However, the price movement was strong, indicating high activity from sellers and buyers. The trading volume on eight major exchanges followed by CoinDesk reached $ 10 billion for the second consecutive day.
The signals from the bitcoin-derivatives market have shown that traders have turned slightly less positive, with premium contract premiums on spot prices shrinking on major stock exchanges, including Deribit, Binance, OKEx and Huobi.
The premiums are still high compared to January levels, indicating that the bulls are still dominating the market.
Arcane Research, a Norwegian cryptocurrency research firm, noted in its weekly newsletter on Tuesday that funding rates – fees paid by traders for leverage – have dropped dramatically since Monday, a sign that some of this week’s market routes some of the euphoria.
Funding rates on perpetual futures contracts are determined by the market and fluctuate over time as traders take on and decline positions. If the market is bullish, funding rates become positive and traders who take long positions pay short sellers. If the market is bearish, financing is negative and short sellers are paid.
Arcane Research also warned that funding rates would soon rise with perpetrators trading again at a ‘significant’ premium on spot prices on Tuesday.
“Trying to catch a falling knife is a dangerous exercise that could ignite a new cascade of liquidations in the short term,” Arcane Research wrote.
There has apparently been little change this week in the outlook for loose monetary policy, which has driven many institutional investors to buy bitcoin as a hedge against eventual inflation. Federal Reserve Chairman Jerome Powell on Tuesday, in testimony before the US Senate Banking Committee, insisted on his previous message that easy monetary policy would not soon emerge, given the need to keep borrowing rates low for as long as necessary for the economy to heal. .
“We see the current downturn as nothing more than a necessary correction to take a very strong market time to consolidate and recover before it finally wants to go up,” said Joel Kruger, cryptocurrency strategist at institutional cryptocurrency exchange LMAX Digital , said. said.
And it turns out that some are buying the latest dip, as CoinDesk reported earlier today.
Ether laer; high fees force more liquidations on DeFi lending platforms
Ether (ETH), the second-largest market-capitalized cryptocurrency, was lower on Tuesday, trading around $ 1,524.42, slipping 14.08% in 24 hours from 21:00 UTC (16:00 ET).
Similar to bitcoin, eaters’ trading volume on major exchanges exploded again on Tuesday.
While the price of ether is still being corrected, another record $ 115 million in decentralized finance (DeFi) lending positions, based on the Ethereum blockchain, was wiped out on Tuesday, as reported by CoinDesk.
Read more: DeFi lending platforms liquidate $ 115 million in loans as ETH price drops
Other markets
Digital assets on the CoinDesk 20 are mostly red on Tuesday. There were no significant winners from 21:00 UTC (16:00 ET).
- Oil rose 0.45%. Price per barrel West Texas Intermediate Crude Oil: $ 61.98.
- Gold was 0.21% in the red and at $ 1805.15 at the time of printing.
- U.S. Treasury yields for ten years fell to 1.359% on Tuesday.
