Bitcoin Succumbs To Selling Pressure; Ether Below $3K
By Laxmikant Khanvilkar
Virtual digital assets (VDA) are stacked against multiple headwinds including gold, interest rates and the lack of buying ahead of the halving event. The risk sentiment remained fragile in the face of higher-for-longer U.S. interest rates. Persistent geopolitical tensions in the Middle East, also kept traders largely on the sidelines.
Apparently, price of Bitcoin (BTC) slipped towards $59,000 mark during the U.S. trading session. It has since recovered to trade at $61,455 after losing 4% in the past 24-hours. The largest cryptocurrency by market value remained in a trough between $60,000 and $70,000 for a month after hitting a record high above $73,000 in March.
Current scenario of interest rate uncertainty does not augur well for crypto markets, which often thrives in a low-rate, high-liquidity environment.
Recent comments by Fed Chair Jerome Powell have dashed the rate cut hopes. He said that sticky inflation gave the Fed little confidence to begin cutting interest rates.
Focus is now shifted to the upcoming halving event, which will take place in the coming days with the generation of block no. 840,000 on the Bitcoin blockchain. This would result in the reduction of new Bitcoin being mined, and peddle the narrative of token scarcity and increase in its value.
The weakness in bitcoin echoed through most crypto markets.
Ethereum (Ether), the second largest cryptocurrency by market capitalisation, has finally gave up to selling pressure. It slipped below $3,000 level and recently changed hands at $3,006 losing 2.7%.
Elsewhere, ADA, AVA, BNB, alongside certain altcoins have suffered losses.
The global crypto market cap decreased 3.7% to $2.23 trillion in the last 24 hours. Similarly, the total crypto market volume fell 6% to $97 billion. Total volume in DeFi is currently $7 billion, and all stablecoins are $92 billion, representing 7% and 94%, respectively, of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 54%, down 0.4% over the day.
The IC15 index, the barometer of the top fifteen tokens, slumped 4% to 75,884.
Meanwhile, Bitcoin’s supply on centralized cryptocurrency exchanges is likely to run out and, hence, it would become twice as rare as gold after the halving event, as per the report published by the cryptocurrency exchange Bybit. The report details that there are only 2 million BTC left on cryptocurrency exchanges and, assuming a daily inflow of $500 million from spot Bitcoin exchange-traded funds (ETFs), around 7,142 BTC will be leaving exchange reserves on a daily basis.
Per Bybit’s report, Bitcoin’s stock-to-flow is currently around 56, while gold’s is 60. After the upcoming halving event, expected later this month, Bitcoin’s stock-to-flow ratio will double to 112.
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