The drop in sentiment towards cryptocurrencies caused by bad economic outlook In the broader markets, a slump in the broader market on Tuesday caused hundreds of millions of dollars in losses to traders betting on higher prices, the data showed.
Bitcoin (BTC) lost support from the $40,000 pivot level on Tuesday evening, and fell to $38,121 on Wednesday morning before a nominal rally during Asian trading hours. Ether (ETH) broke below the $3,000 mark to reach as high as $2,781.
Bitcoin slipped below the pivotal support level, but rose in the Asian hours on Wednesday. (TradingView)
The decline in bitcoin and ether has led to sharp declines in other major assets. In the past 24 hours, Dogecoin (DOGE) is down 10% after a two-day rally, while Terra’s LUNA has lost 7.2%. BNB Chain and Solana’s BNB and SOL outperformed, declining just 2%, while other assets are down at least 4%.
About $281 million was lost in “buy trades” due to liquidations in futures tracked by cryptocurrencies, which represents 81% of all futures trades in the past 24 hours. Liquidations in the cryptocurrency market occur when a trader does not have enough funds to fund a margin call – or an additional collateral required by law. stock trading To maintain the negotiating position of the funder.
Cryptocurrency markets have seen liquidation losses of over $350 million in the past 24 hours. (Coinglass)
Overall, liquidation in the cryptocurrency market exceeded $350 million, the third highest level in April. More than $128 million came from bitcoin futures, while $92 million came from ether futures. Dogecoin futures lost $24 million, a similar loss on Tuesday.
Troubles in Asia and disappointment in the United States
to retreat encryptionCurrencies come across the market on Tuesday amid waning optimism in financial markets in general.
China continued to fight the outbreak of the Corona virus, which dragged Asian markets, while the US Federal Reserve approached a major meeting next week that is expected to see interest rates rise sharply to tighten monetary policy in the country. On the same topic: Why Dogecoin, EOS, and Theta Stocks Soared Today.
Russian troubles shaken stocks in Europe. Reports suggest the country may cut off gas supplies to the region, which could stifle domestic growth and economies. Russia has already cut supplies to Poland and Bulgaria, driving up gas prices in Europe.
However, sentiment appears to have stabilized on Wednesday. European stock indices are up since the opening, with the German Stoxx 600 and DAX up 0.29%. S&P 500 and Nasdaq futures rose 1%, and the Shanghai Composite Index rose 2.5% as China promised to launch more infrastructure projects to support the local economy.
Relief in Asian and European markets saw a slight recovery in bitcoin, adding $500 since the Asian morning hours on Wednesday. But a failure to reclaim the $40,000 level could be bearish for bitcoin, according to some analysts.
“Bitcoin suddenly fell below a critical support line, a bearish signal,” Alex Kuptsikevich, chief financial analyst at FxPro, wrote in an email to CoinDesk. “At the same time, the breakout to the upside was not confirmed by buying near the previous local lows.”
However, Kuptsikevich noted that institutional investors have withdrawn significantly less capital from cryptocurrency exchanges than in the previous week, citing data from CoinShares. “The net inflow of funds last week was $7.2 million, although it was down from the previous two weeks when investors withdrew more than $231 million,” he said.
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