Bitcoin at $64K: Sell-off triggered by hawkish comments from the new Fed chair

Market overview

The crypto market capitalisation fell 2.6% over the day to $2.2T, following a global sell-off of risky assets triggered by hawkish comments from the new Fed Chair, Warsh. However, after the initial sell-off, buyers appear to be returning to the markets, in line with a recovery in risk appetite in the equity market. Whether this is good or bad, cryptocurrencies have once again become tied to the movements of the dollar and the equity market. Among the popular coins, the best performers over the last 24 hours were Stellar (+7.3%), Algorand (+1%) and Tron (+0.7%), which were rare exceptions against the backdrop of a broadly falling market. The biggest fallers were Uniswap (-14%), Zcash (-7.7%) and SushiSwap (-6.1%).

Bitcoin took a hit amid a global sell-off in risky assets, plunging below $64K and towards the lower boundary of the upward trading range in place for almost two weeks. Unless there is a rebound from current levels, we will have grounds to conclude that the rally has ended. A break below the recent lows in the $59K–$60K range would confirm that the sell-off has reached a new level, with a potential target for bears near $45K.  

News background

Bitcoin remains under pressure amid fears of further selling by Strategy, according to QCP Capital. The company may need to sell more BTC to fund its dividend payments.

One of Strategy’s main mechanisms for buying Bitcoin has ceased to function normally. Stretch (STRC) preference shares have traded below their $100 par value for several weeks, limiting the company’s ability to raise funds through them to buy new BTC.

BitMEX co-founder Arthur Hayes has begun increasing his holdings in the second-largest cryptocurrency following the altcoin sell-off. According to Onchain Lens, 4,400 Ethereum, worth approximately $7.9 million, were deposited into a wallet linked to him over two days.

Selling pressure in the altcoin market has reached its highest level in the past five years. The cumulative net selling volume on centralised exchanges has approached $209 billion, according to CryptoQuant. This is the worst figure since records began in 2020.

The largest platform for launching meme coins has seen a significant drop in activity. The number of ‘successful’ meme coins on Pump.fun has plummeted by 80% over three months, and the negative trend has affected the entire Solana blockchain ecosystem.  

Summary: The crypto market has declined in line with equities. BTC is testing the lower boundary of the channel, and selling pressure in altcoins has reached a multi-year high.