Bankless: Bitcoin plummets, where is the opportunity for a turnaround?

As prices continue to slide, is there hope for a turnaround?

Bitcoin’s decline is erasing weeks of gains. Meanwhile, the total market capitalization of the crypto market faced its largest decline since the approval of a spot BTC ETF proved to be a sell-off news event. Will bulls come to the rescue, or will there be more downside?

GBTC’s capital outflows are accelerating. Yesterday’s capital outflows reached US$642.5 million, exceeding the record of US$640.5 million set on January 22. This also resulted in a net loss of all Bitcoin spot ETFs. Outflows reached $154.4 billion.

After yesterday’s performance, GBTC is now experiencing the largest outflows from the ETF since the global financial crisis in March 2009. Grayscale is now working to improve this poor track record by promising to gradually reduce exorbitant fees.

Cryptocurrency prices yesterday were affected by selling pressure from capital flows, with Bitcoin experiencing a sharp drop of nearly 9% after the U.S. stock market opened on Monday.

As prices fall, so do liquidations.

A total of $635 million in leveraged trades were liquidated in the past 24 hours, 80% of which came from long positions. This has resulted in funding rates returning to normal, providing a more favorable market environment for traders considering opening new long positions.

Despite the fluctuations in Bitcoin prices, a Japanese national pension fund with total assets of US$1.4 trillion (the world’s largest pension fund) has announced that it is studying information about Bitcoin to increase Diversity of its investment portfolio. This move brings new prospects for institutional investors to enter the cryptocurrency market.

#The market is showing strong risk-on sentiment, indicating that we are in a bull market. However, it should be noted that a standard bull correction of 30% would take BTC as low as $51,000, providing room for further downside.

Tomorrow’s Federal Reserve interest rate decision is likely to be a major catalyst for market volatility, as recent red-hot inflation data could prompt the Federal Open Market Committee (FOMC) to adopt a more hawkish policy stance than it has over the past few months. Such a shift would delay market participants' expectations for a rate cut and throw cold water on the steady rise in risks that has been going on since October.

The odds of a rate cut this month have plummeted to just 1%, down sharply from the 90% chance of a rate cut in March that markets expected at the end of last year.

The above is the detailed content of Bankless: Bitcoin plummets, where is the opportunity for a turnaround?. For more information, please follow other related articles on the PHP Chinese website!