The cryptocurrency market took a breather on Tuesday, with leading coins like Bitcoin and Ethereum trading sideways. This mirrored the subdued performance of the stock market, which also saw mixed movements. While Bitcoin saw volatile activity in the $67,000 range, bulls remain optimistic about its potential to break through the psychologically significant $70,000 mark and climb higher.
Ethereum, on the other hand, dipped close to the $2,500 mark before recovering slightly. It’s worth noting that both Bitcoin and Ethereum had recently reached multi-month highs, but failed to sustain that momentum.
The market’s cautious mood was further evident in the recent wave of liquidations. Over the past 24 hours, the crypto market witnessed total liquidations exceeding $112 million. Bullish leveraged traders suffered the brunt of these losses. According to Coinglass, nearly $1.6 billion in short positions will be liquidated if Bitcoin manages to rebound to $69,000.
The Open Interest in Bitcoin futures also saw a contraction, dropping by 0.60%, which reflects the trend in the spot price. Despite the uncertainty, market sentiment remains in the “Greed” zone according to the Cryptocurrency Fear & Greed Index.
While the major players navigated a cautious course, some smaller cryptocurrencies made notable gains. Beam (BEAM) and Popcat (POPCAT) both saw substantial increases of over 10%, while Kaspa (KAS) recorded a 5.72% jump.
The global cryptocurrency market cap currently stands at $2.33 trillion, a 0.66% decrease from the previous day. This comes as major stock indexes also ended their trading sessions lower for the second consecutive day. The Dow Jones Industrial Average dropped by 0.02% to close at 42,924.89, while the S&P 500 dipped by 0.05% to 5,851.20. The tech-focused Nasdaq Composite closed slightly higher at 18,573.13, offering a glimmer of hope in an otherwise sluggish market.
The recent market activity is largely attributed to the rising benchmark 10-year Treasury yield, which climbed above 4.2% for the first time in nearly three years. This has led to concerns about inflation and its impact on the economy. Meanwhile, investors are anticipating a 25 basis point rate cut during the next Federal Open Market Committee (FOMC) meeting, according to the CME FedWatch tool.
Adding to the complexities of the market, popular cryptocurrency analyst Justin Bennett believes Bitcoin might be set for a downward trajectory. He suggests that the current range-bound trading action could be a pause before further decline. However, he also acknowledges the possibility of a short-term liquidity grab at the $68,200 mark.
In an interesting development, Kaiko, a cryptocurrency analytics firm, reported that the Bitcoin premium on Korean exchanges has transformed into a discount. Historically, this has been seen as a precursor to Bitcoin rallies. Whether this trend will repeat itself remains to be seen.
The cryptocurrency market is characterized by its inherent volatility, and navigating this landscape requires a clear understanding of the factors at play. While the current market environment suggests caution, opportunities can emerge for investors who are able to identify and capitalize on trends, particularly in the context of the significant gains and liquidations observed in recent days.
