Cryptocurrencies have gone downstream
Bitcoin has been losing 4.5% within last 24 hours, falling back to $43.3K. Ethereum lost 4.9%, and other leading altcoins fell in price from 3.5% (BNB) to 9.7% (Solana).
According to CoinMarketCap, the total capitalization of the crypto market sank by 4.7% overnight to $2 trillion. The Bitcoin Dominance Index added another 0.1pp to 41.3% on the back of more altcoins weakening.
The crypto-currency index of fear and greed grounded at 34 by Thursday morning, having lost 14 points and turning into a state of fear. This is the lowest value in last two weeks.
After several days of sliding, the fall of bitcoin accelerated in the midst of trading in Europe, reaching two-week lows just above $43,000. The negative dynamics of the cryptocurrency market was facilitated by the fall of global stock indices. The published minutes of the Fed meeting showed tougher rhetoric than expected, which put pressure on all risk-sensitive assets.
News about the arrest of the servers of the darknet resource Hydra with the confiscation of 540 bitcoins, as well as sanctions against the Garantex crypto exchange could have a negative effect on the whole crypto market.
According to Glassnode, the number of bitcoins on exchanges has fallen to the lowest since August 2018. Investors have been withdrawing coins since the beginning of March, which is often taken as a signal to keep Bitcoin out of the market for a long time. This reduction in active supply often pushes the price up. However, now we are also seeing increased sales from institutionals.
Reports that Tesla's CEO Elon Musk had become Twitter's largest shareholder initially caused Dogecoin to soar more than 20%, as Musk had previously used the coin to pay for small Tesla goods. Potentially, there could be more applications for Doge in Twitter. However, by Thursday morning its price returned to the levels of the beginning of the week, still showing that this "dog" is not yet able to swim against the current, just as Bitcoin cannot become a meaningful fish against a big pond of stock markets.
Author
Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.
