Why is Bitcoin dropping and why are Ethereum, altcoins taking BTC’s lead?
Bitcoin's sell-offs follow the lackluster debut of the newly-listed spot ETFs in Hong Kong.
- Bitcoin was trading 16% below its ATH recorded in March.
- Further downsides could be potentially dangerous for the broader market.
Bitcoin [BTC] sank below $60,000 during U.S. trading hours Tuesday, extending a string of losses in what has been one of the worst months for the cryptocurrency market in recent memory.
Bloody April
The world’s largest digital asset was down nearly 5% in the 24-hour period, data from CoinMarketCap showed. It ended April at a 14.5% monthly discount.
As of this writing, it was hovering over $58,000, down 16% from its all-time high (ATH) recorded in March.
The slump rippled across the market, causing other coins to trade in the red.
More than $36o million worth of positions were liquidated in the last 24 hours, with longs accounting for 85% of the total, AMBCrypto noted using Coinglass’ data.
About $107 million in Bitcoin liquidations was observed in the 24-hour period.
What is causing negativity?
The sell-offs followed the lackluster debut of the newly-listed spot ETFs in Hong Kong. They recorded just about $11 million in trading volume on the first day, according to data from Hong Kong Stock Exchange.
This was a fraction of what U.S.-based spot ETFs clocked in their debut in January.
U.S. spot ETFs were not exactly having a great time either, as they saw net outflows of $161 million on Tuesday, the fifth straight day of outflows, AMBCrypto examined using SoSo Value data.
Moreover, expectations of the U.S. Federal Reserve keeping the interest rates steady in the upcoming FOMC meeting in light of hotter-than-expected inflation data was also prompting traders to take out their capital from riskier investments.
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What to expect next?
Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin talked about the significance of Bitcoin’s current price levels in a statement shared with AMBCrypto.
“Bitcoin was retesting the crucial support zone of $58,000-$60,000. This zone holds significant importance for the short-term prospects of altcoins. If it is lost, altcoins could potentially suffer further downsides.”
The increasing FUD might help in a creating a local bottom. While reacting to the crypto market’s greedy state, popular technical analyst Ali Martinez said that more fear was needed for a sustained rebound.
