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⚡Flash Crash Rocks Crypto Markets🩸

Croxroad

04 Apr 2024 — 3 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:

🫗 Crypto Meltdown

The cryptocurrency market recently endured a staggering setback, shedding over $200 billion in value between April 1st and 2nd, marking an 8.7% decline in its total market capitalization. This downturn precipitated significant liquidations totaling more than $770 million. Bitcoin, after rallying to $71,300 on March 31st, witnessed a subsequent 8.3% drop over the following two days, ultimately settling at $66,000. This decline triggered a wave of liquidations, with Bitcoin alone accounting for $216 million and Ethereum contributing $165 million to the total.

Leading exchanges such as Binance and OKX were profoundly impacted by the market plunge, with Binance recording the highest liquidation amount at $341 million within a 48-hour period, followed closely by OKX at $284 million. Long positions dominated the liquidations, amounting to over $610 million, indicative of a prevailing bullish sentiment that ultimately proved detrimental to numerous traders. These liquidations precipitated a significant drop in perpetual funding rates, prompting a readjustment of BTC spot prices from $60,000 to $72,000.

The recent downturn, though significant, may herald a beneficial recalibration for the market in the months ahead. Analysts suggest that the pullback was necessary, given the overextended prices observed across the crypto space, with the total market capitalization ballooning from $1.6 trillion to $2.7 trillion since the beginning of the year. Bitcoin's current price of $66,000, coupled with neutral RSI levels and constricting Bollinger Bands, sets the stage for a potential surge akin to the 70% increase witnessed after BTC reached the $42,500 level previously. Despite recent corrections and liquidations, experts maintain a bullish outlook for the long term, advising investors to hold onto their assets and remain optimistic about the market's trajectory.

🌽 BTC Sell Signal Effect

Bitcoin has experienced a 7.21% correction following a forecasted sell signal, hinting at a potential ongoing downtrend. The imminent halving event adds weight to this downward trajectory, with the US Dollar Index indicating further strength. This surge in the US Dollar's value signals a risk-off market sentiment, likely impacting assets like stocks and cryptocurrencies adversely.

Bitcoin's recent lacklustre momentum, persisting for over three weeks, has erased gains from the previous week. Several factors contribute to this stagnation, including the failure to surpass the previous all-time high of $69,138 and the MRI indicator flashing a sell signal, predicting potential downward movements for BTC. Additionally, the strengthening US Dollar Index presents a notable headwind for crypto markets, while the impending Bitcoin halving around April 20th may exacerbate selling pressure, similar to past halving events.

The upward trajectory of the US Dollar could persist, particularly if upcoming economic reports like the JOLTS job openings for February and the NFP report for March indicate a robust labour market. However, a decline in job growth could temper the Dollar's bullish momentum. Despite minor fluctuations, the US Dollar Index has surpassed key resistance levels, suggesting further upside potential. As long as the Dollar continues its ascent, it's likely to exert a negative influence on risk-on assets such as stocks and cryptocurrencies, amplifying Bitcoin's current correction.

🫵 Transferring Crypto To Yourself

Transferring cryptocurrency between your own wallets or accounts doesn't trigger taxable events. You can move your assets while retaining their original cost basis and acquisition date, ensuring seamless tracking of your potential tax liabilities for future sales.