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⚡Bitcoin Bloodbath🩸

Croxroad

20 Mar 2024 — 4 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

📉 Bitcoin's Black Tuesday

Bitcoin’s (BTC) price correction accelerated on Tuesday as U.S.-listed spot exchange-traded funds (ETFs) fell out of favour, triggering the largest single-day percentage decline since November 9, 2022. The leading cryptocurrency by market value plummeted over 8% to dip below $62,000, according to data from the charting platform TradingView. This downturn marked a stark reversal from the record highs of over $73,500 reached just last week, with the CoinDesk 20 Index also retracing 16% over the same period.

The latest slide in Bitcoin’s price has been attributed to various factors, including significant outflows from spot ETFs, as highlighted by trader and economist Alex Kruger. Provisional data from investment firm Farside revealed a staggering net outflow of $326 million from spot ETFs on Tuesday alone, marking the largest on record. Moreover, Grayscale’s ETF saw a record outflow of $643 million the day prior. Kruger identified excessive leverage, a downturn in Ethereum (ETH) which influenced market sentiment on ETF approval prospects, and manic speculation in Solana as key contributors to the downturn.

While Bitcoin’s woes dominate headlines, Ethereum, the second-largest cryptocurrency by market value, also experienced a downturn. After peaking at around $4,000 following the DenCun upgrade last week, ETH has since declined to $3,130. One factor contributing to this slide is the diminishing likelihood of the U.S. Securities and Exchange Commission (SEC) approving an ether spot ETF by May. Additionally, the crypto market's overheated nature earlier this month, with long traders paying exorbitant funding rates to maintain bullish bets, signalled an impending correction.

Looking ahead, investors are eyeing the Federal Reserve’s rate decision scheduled for Wednesday, which will be followed by Chairman Jerome Powell’s press conference. Greg Magadini, Director of Derivatives at Amberdata, emphasised the significance of this event in gauging the Fed's stance on future rate cuts amidst a robust economy and persistent inflation. The recent uptick in the dollar index and U.S. Treasury yields, driven by stubborn consumer and producer price indices, has dampened the appeal of risk assets, including cryptocurrencies and emerging technologies. As market participants brace for further turbulence, all eyes remain on regulatory decisions and macroeconomic developments shaping the trajectory of digital assets.

🐻 Bitcoin Bears Roar

BTC price weakness continues to target the crucial $60,000 level, with data from Cointelegraph Markets Pro and TradingView indicating another night of losses, bottoming at $60,760 on Bitstamp. The leading cryptocurrency's decline of 17.5% from its all-time highs persisted amid mounting selling pressure driven by various headwinds.

Outflows from the United States’ spot Bitcoin exchange-traded funds (ETFs) and the impending decision on interest rates by the Federal Reserve added to the downward momentum. While expectations for the Federal Open Market Committee (FOMC) meeting on March 20 are leaning towards unchanged rates, all eyes are on Fed Chair Jerome Powell’s commentary for insights into future policy guidance.

According to The Kobeissi Letter, it's too early to expect a policy pivot despite recent events, with the chances of rate cuts in March deemed minimal by CME Group’s FedWatch Tool. However, the odds for June's FOMC meeting look more favourable at 55%.

The second consecutive day of net outflows from spot ETFs, as reported by United Kingdom-based investment firm Farside, further compounded BTC’s woes. While the outflows from the Grayscale Bitcoin Trust (GBTC) were lower compared to the previous day, sluggish inflows to other ETF products indicated a lack of market enthusiasm.

Financial commentator Tedtalksmacro suggested that traders might be adopting a cautious stance ahead of the FOMC meeting, contributing to the outflows. QCP Capital warned of potential implications for BTC price strength if the trend of net outflows continues, highlighting the significance of ETF flows in determining market sentiment and support levels.

As uncertainty prevails amidst market turbulence and regulatory developments, investors remain vigilant for cues from both macroeconomic factors and institutional behaviour, shaping the near-term trajectory of Bitcoin and the broader cryptocurrency market.

🪙 GainBitcoin

The GainBitcoin Ponzi scheme, orchestrated by businessman Amit Bhardwaj in 2018, defrauded over 8,000 individuals of INR 2,000 crore. Bhardwaj enticed investors with promises of high returns, offering a 10 percent yield under an 18-month contract. However, the scheme proved to be fraudulent, leaving many financially devastated. This incident underscores the need for caution and due diligence in the cryptocurrency space.