Data shows Bitcoin and altcoins are at risk of falling 20% ​​to new yearly lows – Instant News

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After the ascending wedge formation was broken on August 17th, the total crypto market cap quickly fell to $1 trillion and the bulls’ dream to reclaim the $1.2 trillion support last seen on June 10th was, moved even further into the distance.Total crypto market cap, billion USD.Source: TradingView The deteriorating conditions are not unique to…

After the ascending wedge formation was broken on August 17th, the total crypto market cap quickly fell to $1 trillion and the bulls’ dream to reclaim the $1.2 trillion support last seen on June 10th was, moved even further into the distance.Total crypto market cap, billion USD.Source: TradingView

The deteriorating conditions are not unique to crypto markets.WTI oil prices fell 3.6% on Aug.22, down 28% from the June 8 peak of $122.

The 5-year US Treasury yield, which bottomed at 2.61% on Aug.1, reversed the trend and is now trading at 3.16%.All of these are signs that investors have less confidence in the central bank’s policy of charging more money to hold these debt instruments.

Recently, Goldman Sachs’ chief US equity strategist, David Kostin, explained that the S&P 500’s risk/reward ratio is trending down after a 17% rally since mid-June.

According to a note to clients Kostin authored, upward inflation surprises would force the Federal Reserve to tighten the economy more aggressively, which would hurt valuations.

Meanwhile, extended lockdowns ostensibly aimed at curbing the spread of COVID-19 in China and housing debt woes prompted the PBOC to prompt the central bank to lower its policy rate on five-year lending to 4% from 4.45% on August 21.30% cut move came a week after the People’s Bank of China surprisingly cut interest rates.Crypto investor sentiment is on the verge of neutral to bearish

Risk appetite spurred by rising inflation has investors anticipating further rate hikes, which in turn will reduce investor appetite for growth stocks, commodities and cryptocurrencies.As a result, traders will likely seek refuge in the US dollar and inflation-linked bonds during times of uncertainty.

Crypto Fear and Greed Index.Source: Alternative.me

The Fear and Greed Index hit 27/100 on Aug.21, the lowest reading in 30 days for this data-driven sentiment gauge.The move confirmed that investor sentiment was moving away from a neutral reading of 44/100 on Aug.

16 and reflects the fact that traders are relatively concerned about the near-term price movements of the crypto market.

Below are the winners and losers over the past seven days as total crypto capitalization fell 12.6% to $1.04 trillion.While bitcoin ( Bitcoin ) saw a 12% decline, with a handful of mid-cap altcoins falling 23% or more over the period.Weekly winners and losers among the top 80 coins.Source: nomics

EOS surged 34.4% after its community grew bullish on the almond hard fork scheduled for September.The update is expected to be complete terminate the relationship with Block.one .

Chiliz (CHZ) gained 2.6% according to Socios.com invested $100 million for a 25% stake in Barcelona Football Club’s new digital and entertainment division.

Celsius (CEL) fell 43.8% after a bankruptcy filing on August 14 indicated a $2.85 billion mismatched funds .Most tokens performed negatively, but retail demand in China improved slightly

The OKX tether ( USDT ) Premium is a good indicator of demand from crypto traders from China.It measures the difference between peer-to-peer (P2P) trading in China and the US dollar.

Excessive buying demand tends to push the indicator 100% above fair value, and during bearish markets, Tether’s market supply is flooded, causing a discount of 4% or more.Tether (USDT) peer to peer vs USD/CNY.

Source: OKX

On Aug.21, Tether price in Asian peer-to-peer markets hit its highest level in two months, currently at a 0.5% discount.However, the index remains below the neutral to bearish range, suggesting weak retail demand.

Traders must also analyze the futures markets to rule out externalities specific to the Tether instrument.Perpetual contracts, also known as inverse swaps, have an embedded rate that is typically calculated every eight hours.Exchanges use this fee to avoid imbalances in exchange rate risk.

A positive funding rate indicates that longs (buyers) are demanding more leverage.However, the opposite situation occurs when short sellers (sellers) need additional leverage, making the funding rate negative.Cumulative perpetual futures funding rate on August 22nd.Source: Coinglass

Perpetual contracts reflected neutral sentiment after Bitcoin and Ether had relatively flat funding rates.

The current fees result from a balanced situation between leveraged longs and shorts.

As for the remaining altcoins, even the weekly negative funding rate of 0.40% for Ether Classic (ETC) wasn’t enough to deter short sellers.A 20% drop to retest yearly lows is likely in the pipeline

According to derivatives and trading indicators, investors are moderately concerned about a steeper global market correction.The lack of buyers is reflected in Tether’s slight discount in Chinese yuan pricing and near-zero funding rates in the futures markets.

These neutral to bearish market indicators are concerning as total crypto cap is currently testing the critical $1 trillion support.If the U.S.

Federal Reserve effectively continues to tighten the economy to quell inflation, chances are high that crypto will retest yearly lows of $800 billion.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph.Every investment and trading movement involves risk.You should do your own research when making a decision.Related Posts .

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Data shows Bitcoin and altcoins at risk of a 20% drop to new yearly lows

After the rising wedge formation was broken on Aug.17, the total crypto market capitalization quickly dropped to $1 trillion and the bulls' dream of recouping the $1.2 trillion support, last seen on June 10, became even more distant. The worsening conditions are not exclusive to crypto markets.The price of WTI oil ceded 3.6% on Aug.22,…
Data shows Bitcoin and altcoins at risk of a 20% drop to new yearly lows

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