The hope for a continued recovery of the cryptomarkt disappeared rapidly on Friday, when a wide sale of almost all the race wins from earlier this week.
Bitcoin (BTC), which noted around $ 88,000 just a few days ago, made a sharp dive to $ 83,800. The wider market had to endure it even more. Large altcoins such as Avalanche (Avax), Dogecoin (Doge), Near (Near) and Uniswap (Uni) saw their value fall by almost 10%. In total, no less than $ 115 billion in market value was wiped out of the global cryptomarkt.
Ethereum under pressure
Ethereum (ETH) also had heavy blows and fell by more than 6%. The currency has thus noted the lowest relative level compared to Bitcoin since May 2020 – a clear signal of the continuing weakness of ETH opposite BTC.
That trend is reinforced by the lack of interest in Ethereum ETFs. No net inflow has been measured since the beginning of March, while Bitcoin ETFs attracted more than $ 1 billion in fresh capital in the same period, according to data from Farside Investors.
Negative sentiment on stock markets
The price drop in Crypto coincided with substantial losses at the US stock markets. The S&P 500 fell by 2% on Friday, while the Nasdaq technology index even lost 2.8%-largely as a result of disappointing economic figures. Shares from the crypto sector also received hard blows: micro strategy (MSTR), the largest business Bitcoin owner, closed 10% lower. Coinbase (Coin), one of the largest crypto fairs, lost 7.7%.
The reason for the unrest was the inflation report (PCE) for February, which showed a price increase of 2.5% on an annual basis. The core inflation was 2.8%, just above expectations. Although consumer spending increased by 0.4%, inflation-corrected figures indicate minimal real growth. According to the GDPNOW model of the Federal Reserve of Atlanta, the American economy may be shrinking with 2.8% in the first quarter -or with 0.5% if gold imports and exports are included. These prospects strengthen the concerns about possible stagflation.
In addition, the prospect of new, wide American import tariffs-announced by the Trump and from 2 April, the so-called “Liberation Day”-also ensures extra nervousness among investors.
Correction or healthy filling of CME gap?
Bitcoin has recently exhibited a strong correlation with the Nasdaq. If US shares sink further, it can also put extra pressure on the cryptomarkt. Yet there is also an optimistic explanation for the recent price decrease: according to Coindesk analyst James van Straten, this correction could have to do with filling a so-called CME Gap around $ 84,000-$ 85,000. That price gap originated between the opening of the Trade Week on Monday and the final race of the week before on the Chicago Mercantile Exchange.
Van Straten emphasizes that any further relapse should be well supported in the zone between $ 70,000 and $ 75,000.
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Source: https://newsbit.nl/bitcoin-koers-zakt-onder-84-000-na-massale-verkoop-van-115-miljard/
