On Tuesday, the cryptocurrency market and the US stock market continued their downward trend. By the end of the day’s trading, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite Index all experienced significant losses. The Dow Jones fell nearly 400 points, marking its worst quarterly start since 2020.
The rising cost of borrowing has weakened the stock market’s momentum and put pressure on the S&P 500. The 10-year and 30-year US Treasury bond yields reached their highest levels since early November.
Bitcoin
On Tuesday, Bitcoin briefly fell below $65,000, hitting a daily low of $64,591.50. By the end of the US stock market session, the price had slightly recovered above $65,000. Over the past 24 hours, the entire cryptocurrency market has seen a 3.9% decline. Among the major cryptocurrencies, Bitcoin (-5.68%), Ethereum (-6.43%), and Dogecoin (-10.33%) led the decline.
The meme coin sector experienced a sharp drop of about 17% in the past 24 hours.
The US government transferred nearly $2 billion worth of Bitcoin to Coinbase, triggering concerns of selling pressure. Market participants have been closely watching the US government’s Bitcoin address transfers, as any selling action could potentially affect the price of cryptocurrencies. Typically, an increase in the amount of Bitcoin flowing into exchange wallet addresses increases the selling pressure on assets and triggers a decline in asset prices.
Data from Arkham Intelligence shows that on April 2, 2024, the US government executed a Bitcoin transfer involving nearly $2 billion, sending the tokens to Coinbase Prime addresses. The transfer amount was 30,174.70 BTC and was successfully processed at block height 837,413.
In recent years, the US Department of Justice has accumulated a large amount of BTC through the seizure of cases such as Silk Road, Bitfinex hack, and the James Zhong case. The last confirmed sale was in March 2023 when the government sold approximately 50,000 Bitcoins related to the Silk Road website, seized at the end of 2022, for a price of $216 million, involving 9,861 Bitcoins.
As of April 2, 1:10 PM Eastern Time, the US government still holds 215,246 BTC (worth $14 billion) and 50,147 ETH (worth $163 million).
After a significant drop in the price of Bitcoin, the news of the government transfer caused further decline, falling below $65,000, followed by a slight rebound.
Cryptocurrency analyst and commentator Phyrex commented on X platform, “This transfer to exchanges for selling, if it has been concluded, now it’s the delivery, and we’ll see the price at delivery and the choice of new holders.”
Impact of Federal Reserve rate cut expectations
Analysts said that changes in expectations regarding the pace of Federal Reserve rate cuts have made traders uneasy. According to data from CME Group, federal funds futures indicate a 40% chance that the Federal Reserve will maintain interest rates at the current level before June.
Yesterday, US manufacturing data exceeded expectations. However, a Federal Reserve official stated that three rate cuts in 2024 still seemed reasonable.
Loretta Mester, President of the Federal Reserve Bank of Cleveland, stated on Tuesday that she continues to expect three rate cuts this year, as part of the quarterly economic forecasts submitted at the last month’s Federal Reserve meeting, which makes Mester a slight majority among the 10 officials expecting at least three rate cuts this year. According to the most likely economic forecast, nine officials believe that two rate cuts or fewer may be appropriate.
Mary Daly, President of the Federal Reserve Bank of San Francisco, said in a speech that three rate cuts this year were a reasonable baseline scenario and that the forecast did not constitute a commitment.
Bitcoin price must be maintained above $65,000
Cryptocurrency analyst Rekt Capital stated in an article on April 2 that Bitcoin failed to complete a retest after a breakthrough, and as the Bitcoin halving approaches, the price trend will continue to slow down.
Rekt stated, “Bitcoin failed to complete a retest after a breakthrough. Technically, Bitcoin could still recover above the historical high of around $69,000 before the new weekly candle closes.” The analyst added that the Bitcoin price needs to be maintained above the weekly low of $65,600 to avoid further losses.
According to data from Coinglass, if the Bitcoin price falls below the key level of $65,000, all leveraged long positions worth over $249 million on exchanges will be liquidated.
Technical analyst Lockridge Okoth stated that if the Bitcoin price falls below the support level of the 200-day exponential moving average (EMA) at $65,556 (which has been crucial since October), the decline could extend to the level of $60,800.
On the contrary, if the 200-day moving average holds as support, the Bitcoin price will rebound. Breaking the support level of $69,000 will indicate more buying orders, increasing the likelihood of further upward movement, with the first target being the peak of $73,777, and then the opportunity to set a new high above the $74,000 range.
Andrey Stoychev, Head of Prime Brokerage at Nexo, stated that the adjustment in Bitcoin price is mainly attributed to new users entering the Bitcoin market in the two months since the approval of the US spot ETF. Stoychev expects a short-term adjustment as newcomers want to invest in Bitcoin.
He said, “The bull market in Bitcoin has brought returns, with three out of four cycles surpassing previous highs. Looking back at 2020, Bitcoin skyrocketed 250% within four months after breaking the previous all-time high. This suggests that if history repeats itself in this cycle, the potential trajectory of Bitcoin will reach $231,000.”
Author: Mary Liu, Bitpush News
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Tags:
2023 Market Trend
Coinbase
MEME
Silk Road
Ethereum
Halving
Department of Justice
Selling Pressure
Bitcoin
Bull Market
Dogecoin
Spot Bitcoin ETF
Federal Reserve
Market Trend
Inflation
Hackers
Note: All articles from Bitpush represent the author’s views and do not constitute investment advice.
Original article link: https://www.bitpush.news/articles/6563721
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