Monday, April 11, Bitcoin led other cryptocurrencies in a market-wide plunge, with the pioneer cryptocurrency losing over 4.75% since the market opening, albeit tapping $47,000 earlier last week. At press time, Bitcoin is trading around $40,878.
The gloom has seen the entire crypto market dip below $2 trillion after shedding over $100 billion and $352 million in liquidations in the past 24 hours with 121,869 traders having their long positions closed indefinitely. The largest single liquidation order happened on BitMEX for XBTUSD valued at $10M as per Coinglass.
Ethereum which has forerun Bitcoin in the past three or weeks has struggled to show resilience above $3k amid the overnight dump, and is 6.55% down since daily open, trading at $3,034. Cardano (ADA), Terra (LUNA), Avalanche (AVAX), Solana, and XRP are the biggest losers under the top ten coins after shedding 8.73%, 7.57%, 9.31%, 8.78%, 6.89% respectively in the past 24 hours.
Some have pointed to Monday’s market skew to a range of factors including market indecision after a worse than expected personal consumption expenditures price index (PCE) was released on Thursday leading to US stocks falling off the cliff.
The index, which is the preferred inflation barometer by the Federal reserve hit a 40-year high in February, increasing by 6.4% Year-on-Year, further confirming the rising inflation as depicted by the Consumer Price Index (CPI) last month. This places an even harder task on the FED with its plan to tame inflation, trapping investors in the process.
The ongoing war between Russia and Ukraine has also sent energy prices skyrocketing as the U.S. and its allies move in to cut off Russian energy exports. Supply chain disruptions and high labor and operating costs also have a role to play in the ongoing inflation.
That said, pundits are now looking for clues as to where Bitcoin could be headed, as some turn to minor profit-taking. According to Noelle Acheson, Head of Market Insights at Genesis Trading, “Investors are paying more for calls than for puts, but the slight bounce over the past few days is not yet to be significant in terms of a sentiment change.” As of now, it is hard to tell if $40k BTC will sustain based on the behavior of the options.
Market analyst Gareth Soloway believes that Bitcoin is set to pull back to the $30ks. According to him, right now, ‘is a bad point to get into Bitcoin’ and prefers an entry after a decent pullback.
BTCUSD Chart by TradingView
That said, $40,000 no doubt remains a closely watched support, with a section of experts including veteran Trader Peter Brandt counting on a retest along that area after what had seemed to be an ascending triangle.