Crypto stalls as risk appetite shows cracks

Market overview

The crypto market capitalisation fell by 0.74% over the past 24 hours to $2.5 trillion. Today’s top performers include Immutable (+3.2%), SushiSwap (+0.8%) and Tron (+0.7%). The underperformers were Dash (−5.4%), Toncoin (−4.5%) and NEAR Protocol (−4.4%). The crypto market took a step back, despite further gains in stock indices. From its local low at the end of March, the crypto market has risen by 8.6%, a more modest increase than the Nasdaq 100’s 13.6%.

Bitcoin briefly rose above $76K on Tuesday, almost matching March’s peak levels, but had retreated to $73.6K at the time of writing. Buyers are looking for a catalyst to push the price to a new level beyond the consolidation range. If Bitcoin is looking for external signals, it may remain indecisive until key US stock indices hit new highs. However, we are more inclined to believe that the first cryptocurrency’s stagnation is a sign of a fragile risk appetite that will soon manifest in the broader market.

News background

The conflict in Iran has increased the appeal of non-sovereign money and brought Bitcoin closer to serving as a real medium of exchange, according to Bitwise. Since the start of the war in the Middle East, BTC has risen by 12%, whilst the S&P 500 and gold have fallen by 1% and 10% respectively.

Bitcoin could fall to $30K only if the US economy enters a deep recession, according to analyst Benjamin Cowen. A correction of 65–70% from the highs is in line with historical trends and is not exceptional.

According to CoinDesk, derivatives accounted for 76.5% of the total trading volume on centralised crypto exchanges (CEX) in March — the highest figure since September 2023. Derivatives trading volume on CEXs stood at $3.99 trillion — 3.2% lower than in February.

Trump’s nominee for Fed chair has disclosed his cryptocurrency investments. Kevin Warsh has invested in the Polymarket prediction market and several decentralised startups, according to his financial disclosure statement.