Why Is The Crypto Market Down Today? Key Reasons Explained
April 25 2024 - 7:30AM
NEWSBTC
The crypto market is in the red today, with a majority of the
top-100 cryptocurrencies reflecting losses over the last 24 hours.
Notably, only six altcoins, including two stablecoins, have managed
to maintain a positive performance amidst a broader market
sell-off. Several complex and intertwined factors have contributed
to the day’s negative market sentiment, affecting major
cryptocurrencies. Over the last 24 hours, the price of Bitcoin has
decreased by 4.2%, Ethereum has fallen by 5.0%, Solana has dropped
by 8.7%, XRP has declined by 4.7%, and Dogecoin has decreased by
8.3%. #1 Persistent Macroeconomic Uncertainty A primary factor
influencing today’s market movements is the evolving macroeconomic
landscape, particularly concerning US interest rates and inflation
expectations. At the beginning of the year, the market anticipated
aggressive monetary easing by the Federal Reserve. However, the
sentiment has shifted considerably based on recent data and Federal
Reserve signals. “Markets are pricing in fewer rate cuts for this
year compared to the Fed’s dot plot projection of 3 rate cuts by
year end. The implied fed funds rate for December has risen to
5.0%, indicating that the futures market is pricing in only 1 to 2
rate cuts,” Cetera Investment Management stated via X (formerly
Twitter). This week, all eyes are on the release of the Personal
Consumption Expenditures (PCE) price index for March—the Fed’s
favored inflation measure on Friday, April 26 at 8:30 am EDT. Until
then, the market could be in a derisk mode. Related Reading: How To
Outperform In Crypto: Arthur Hayes’ ‘Left Curve’ Strategy The PCE
is anticipated to present a varied view of inflation trends, which
could strengthen the Federal Reserve’s inclination to delay any
increases in interest rates. Analysts predict a slight increase in
the overall PCE Price Index, rising to 2.6% year-over-year from
2.5% in February. Additionally, they expect a decrease in the
index’s month-over-month change, dropping to 0.30% from 0.33%. #2
Crypto Market In Shock Over Legal Action Against Samourai Wallet
The crypto market has also been rocked by yesterday’s legal
developments involving the Samourai Wallet. The US Federal
prosecutors’ decision to charge the founders Keonne Rodriguez and
William Lonergan Hill with money laundering and operating an
unlicensed money transmitting business has sent ripples through the
crypto community. This action underscores the ongoing regulatory
scrutiny within the crypto space. The prosecution of Samourai
Wallet’s founders not only raises questions about the future of
cryptographic privacy but also significantly impacts market
sentiment as it underscores the legal risks inherent in the crypto
sector. The implications of this case extend beyond the immediate
legal concerns, influencing broader market perceptions and investor
confidence. #3 Bitcoin And Crypto Are “Just Ranging” Further
insights into market dynamics come from prominent crypto analysts
who have commented on the state of market liquidity and trader
behavior. “The market has gifted us with a beautiful reset in
trader positioning for Bitcoin. OI weighted funding turned negative
for the first time since October 2023. That was before Bitcoin ran
from 27k to 46k without any meaningful dip,” said Ted, a crypto
analyst on X. This reset refers to a reduction in the overheated
futures market, which could allow the market to consolidate and
potentially build a base for future upward movements. Related
Reading: Akash Network (AKT) Leads Crypto Top 100 With 46% Rise
Today: Here’s Why Emperor, another crypto analyst, described the
current market state through a series of tweets, highlighting the
ongoing consolidation phase post-highs: “Too much panic still on
the timeline but we’ve been ranging since the ATH, that’s all.” He
added, “The bear/bull line is an important resistance + Point of
Control (PoC) of our range. Expecting VaL (Value Area Low) to hold
on pullbacks and VaH (Value area High) to be the next target on
longs if we reclaim level 1.” Bitcoin Price Update Too much panic
still on the timeline but We've been ranging since the ATH, that's
all 1. The bear/bull line is a important resistance + Point of
Control (PoC) of our range. Expecting VaL (Value Area Low) to hold
on pullbacks and VaH(Value area High ) to…
pic.twitter.com/4UTExqQv0n — Emperor👑 (@EmperorBTC) April 24, 2024
#4 Bitcoin ETFs Remain Muted Yesterday’s ETF flows were negative
again. Only Fidelity’s FBTC and Ark Invest’s ARKB had minimal
inflows. GBTC sold more again at -$130.4m and BlackRock had zero
inflows for the first time ever since inception on January 11.
Thus, BlackRock’s (IBIT) inflow streak ended at 70 days. Prior to
this, IBIT entered into the top 10 all time after passing the ETFs
like JETS, BND and VEA. Yesterday's ETF flows by @FarsideUK.We are
back to outflows and of course it's Barry.We had $120.6 million in
outflows yesterday.$GBTC did $130.4 million of outflows. Blackrock
had 0. Which means that after 70 days for the first time they
didn't have any inflows. Price… pic.twitter.com/Akh1agezb6 —
WhalePanda (@WhalePanda) April 25, 2024 Notably, the momentum for
spot Bitcoin ETFs has waned significantly in the past two weeks.
The last notable day of inflows was on March 26, when they
surpassed $400 million—nearly a month ago. On the bright side,
despite this slowdown, there have been no outflows from either
BlackRock or Fidelity. Grayscale’s GBTC remains the primary
negative factor driving outflows. Furthermore, there seems to be a
decrease in investment willingness among traditional sector
investors; the total inflows through ETFs have been stagnant for
more than 30 days, coinciding with a flat trend in Bitcoin prices.
At press time, BTC traded at $64,034. Featured image from
Shutterstock, chart from TradingView.com
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