On the first day of the second quarter on Wall Street, the S&P 500 index and the Dow Jones Industrial Average both fell after new economic data in the United States prompted investors to decrease their bets on interest rate cuts this year. The S&P closed down 0.2% and the Dow Jones fell 0.6%, while the Nasdaq Composite Index rose slightly by 0.1%.
The overall cryptocurrency market declined, with Bitcoin almost testing the key support level of $68,000. It briefly dropped to $68,089.00 during the day and remained below $70,000 at the close of the US stock market, with a 24-hour decline of 1.8%. Ethereum (ETH) fell by 1.54% and dropped below $3,600, while XRP fell by 2.36% and ADA fell by 2.63%. According to Coinglass data, the cryptocurrency market experienced a total liquidation of $316 million in the past 24 hours, with the majority of positions being long positions totaling $257 million.
Traders lower interest rate bets
The biggest data point affecting the market today is the ISM Manufacturing Index, which rose 2.5% to 50.3% in March, surpassing all economists’ expectations. A reading above 50% indicates that manufacturing managers believe the manufacturing market is expanding.
Driven by this data, the US Dollar Index (DXY) broke through 105 for the first time since November 2023, rising 0.49% during the day. The yield on the US 10-year Treasury bond reached a two-week high, rising 13.1 basis points to 4.325%.
ISM reports are not government data included in the Department of Commerce’s quarterly economic growth data. However, they are closely watched by investors. Despite higher interest rates in recent years, investors believe this data indicates a strong economic performance and that the Federal Reserve may not need to cut interest rates to support the economy. Bond traders are currently pricing the probability of a rate cut in June 2024 at less than 50%, which is a shock to the market as investors had previously expected up to six rate cuts.
Last week, Federal Reserve Chairman Jerome Powell emphasized in a speech that the Fed wants to be more confident in the inflation trend before lowering interest rates, and the strong labor market conditions mean there is currently no urgency for a rate cut.
Holiday leads to decreased liquidity
Renowned trader Daan Crypto Trades stated that the Easter holiday may be a factor in the market retracement in recent days.
He mentioned on the X platform, “Apart from some ETH and other tokens in small quantities, Grayscale has not released any data, possibly due to the market being closed around the Easter holiday. It is expected that the usual inflow/outflow will reappear starting from tomorrow.”
Meanwhile, BTC/USD is currently at its lowest level since March 25th, and Daan Crypto Trades believes it is not impossible to fall below the 200-period moving average within a 4-hour time frame (currently at $67,330). He stated, “The price is testing the 4H/1D trend here, and until the price returns above $70,000, it will mostly be testing back and forth.”
At the same time, trading firm QCP Capital warned in its latest “New York Color” update sent to Telegram channel subscribers that there is an increased “downside pressure” in the cryptocurrency spot market. The company stated, “In the past 24 hours, we have seen a strong interest in selling call options and buying put options on BTC and ETH.”
“Smart Money” aims to buy at lows around $62,000
By tracking Binance’s order book liquidity, Material Indicators depicted the BTC price trend from now until the upcoming block subsidy halving.
In a series of posts, Keith Alan, co-founder of Material Indicators, stated, “Although Bitcoin has closed in the green for the seventh consecutive month in its history, the halving does not guarantee a ‘one-way rise.’ Smart Money has lowered its bid for accumulation to $62,000.”
Alan continued to say that Bitcoin may bring problems for institutional buyers as the price fluctuates within a relatively unknown range. However, once the halving is over, people will firmly believe in reaching new all-time highs.
He commented, “At least one entity believes that this is highly likely, as after the BTC price briefly fell below $69,000, their target price for increasing BTC holdings has been lowered to $62,000. This indicates that even institutional players are uncertain about where the price will fall, so they are happy to accumulate within this range through DCA positions, as there is a strong belief that new ATH will occur after the halving.”
BTC to skyrocket to $150,000 after halving
Mark Yusko, CEO of Morgan Creek Capital, stated in an interview with CNBC that although the price of Bitcoin is still below last month’s all-time high, based on its historical performance, the price of Bitcoin could skyrocket to $150,000 after the halving.
He analyzed, “The big moves happen after the halving, and by the end of the year, its trajectory will become more… parabolic. And historically, about nine months after the halving, so sometime around Thanksgiving, Christmas, we will see the peak in price before the next bear market.”
As for Morgan Creek Capital’s strategy in dealing with the bull market, Yusko revealed that they have allocated 80% of their portfolio to private equities and 20% to high liquidity tokens, with a primary focus on tokens such as Ethereum (ETH), Solana (SOL), and Avalanche (AVAX).
Author: Mary Liu from Bitpush News
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Tags:
2023 Market Trend
AVAX
Mark Yusko
Morgan Creek Capital
SOL
XRP
Ethereum
Halving
Bitcoin
Grayscale
Bull Market
Federal Reserve
Market Trend
Inflation
Interest Rate Cut
Powell
Note: All articles from Bitpush only represent the author’s point of view and do not constitute investment advice.
Original article link: https://www.bitpush.news/articles/6557913
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