The cryptocurrency market spent Monday in a very narrow range but started Tuesday with a violent sell-off, losing over 2.8% in 24 hours to $2.47 trillion. Bitcoin is retreating at the same pace as the market as a whole, while Ethereum is down 3.5%. Top altcoins are losing between 2% (Cardano) and 6.6% (BNB), and Tron is temporarily standing out from the crowd, adding 0.25%. This wariness of cryptocurrency traders may be a manifestation of the downturn in risk appetite in global markets, which may soon establish itself in the dynamics of equities and commodities.
Bitcoin has pulled back to $67.6K, returning to the local lows at the beginning of the month. This decisive move downward indicates that a deeper correction is in store. We can see just how strong the bearish sentiment is by the first cryptocurrency’s momentum near $65K, an intermediate round level near where the 50-day moving average and 76.4% Fibonacci retracement level of the rally from the January lows lie. A quick dip below would force a search for support no sooner than $60K.
Cardano, whose relative performance is better than its peers, is in a rather vulnerable position in the medium term, testing support for the past two months at $0.43. It is currently trading in the lower half of the range from the October lows, under the 200- and 50-day moving averages. A failure of support potentially opens the way down to $0.38 or even $0.25.
News background
According to CoinShares, crypto fund investments rose by a record $2.038bn last week, after inflows of $185m a week earlier; the figure marks the fifth consecutive week of growth. Bitcoin investments increased by $1.973bn, Ethereum by $69m and Solana by $0.7m.
The total assets under management (AUM) of all spot bitcoin funds is about $61.1bn. In five months, BTC-ETFs have accumulated 60% of the AUM of gold investment products ($105bn) that have been around for more than 20 years.
Weekly trading volumes for the week rose 55% to $12.8bn.
According to the financial portal Zerohedge, the market recorded a new record high in short hedge fund positions in bitcoin, indicating a significant change in investor sentiment. Bearish hedge fund positions negatively affect the sentiment of other market participants and lead to increased volatility.
According to a study by the Bank of New York Mellon, family wealth managers are willing to allocate about 5% of their investment portfolio to cryptocurrencies. The main factors preventing this are hacker attacks and cybercrime.
The total blocked value of assets (TVL) in the Ethereum-based Tier 2 Base network is over $8bn, surpassing OP Mainnet from the Optimism team. The protocol from Coinbase is now the second largest Ethereum scaling solution, behind only Arbitrum One with $18.27bn.
The team of Notcoin, a Web3 gaming project, reported that its user base has grown to 40 million people. According to the developers’ calculations, players have already earned $1.5 million in TON through 20 campaigns. The team expects this figure to grow tenfold after automating new missions that third-party projects will be able to launch independently.
Information supplied by: The FxPro Analyst Team
