Bitcoin (BTC), the world’s largest cryptocurrency, has encountered selling pressure in the past two days after reaching its 2023 high earlier this week. At the time of writing, BTC is trading 1.59% down at $30,182, resulting in a significant erosion of nearly $25 billion from its market cap since its peak earlier this year.
While the broader crypto market has largely overlooked the actions of the U.S. Securities and Exchange Commission (SEC) this year, the recent selling pressure coincides with macroeconomic developments. Crypto investors have drawn conclusions from the ADP private sector jobs report and the ISM Services Index, both of which demonstrated unexpected strength. However, these positive indicators have been overshadowed by concerns about economic growth and potential inflation, leading to a shift in investor sentiment.
The strong jobs data provides room for the Federal Reserve to further push interest rate hikes, which the broader crypto market perceives negatively, resulting in the observed selling pressure. Nonetheless, analysts highlight that Bitcoin (BTC) is finding strong support at the $30,000 level. Richard Mico, Banxa’s U.S. CEO, emphasized the support level and the positive signals surrounding spot BTC applications. In an email to CoinDesk, Mico stated:
“We could still have a rate hike or two ahead of us, but the Federal Reserve certainly appears to be closing in on peak rates if not already reached. We’ll likely have to wait until next year’s Bitcoin halving to experience full-on bull mode, but we’re getting closer by the day and many are keen to front-run what they expect will be a continued uptrend. The market is reflecting an increasingly optimistic sentiment, and the next 18 months are going to be very exciting.”
Altcoins are also facing higher selling pressure, with Ethereum (ETH) experiencing a 3.61% decline in the last 24 hours, reaching the $1,850 level. Data from Greekas.live reveals that 220k ETH options are set to expire, with a Put Call Ratio of 0.48, a max pain point of $1,875, and a notional value of $410 million.
Despite the selling pressure on ETH, the address activity on the Ethereum network shows robust growth. The accelerated creation of new addresses indicates potential market cap growth in the future, highlighting the underlying strength of Ethereum’s network.
While many major cryptocurrencies initially witnessed significant drops, some managed to recover a portion of their losses. Litecoin and SHIB experienced declines of over 6% and 3%, respectively. In contrast, SOL, the token of the Solana blockchain, surged by more than 11% at one point and remained up by over 4%. The overall performance of the crypto markets showed a recent decline of 1.7%.
As the crypto market navigates these fluctuations, investors closely monitor the developments surrounding Bitcoin and altcoins. The selling pressure and market volatility highlight the need for a cautious approach and a deep understanding of the macroeconomic factors influencing sentiment. While challenges exist, the robust address activity on Ethereum and the resilience of certain altcoins indicate the potential for future growth and opportunities within the crypto space.
In conclusion, Bitcoin faces selling pressure after reaching its 2023 high, while altcoins experience market volatility. The concerns surrounding economic growth and potential inflation have influenced investor sentiment, resulting in shifts in the broader crypto market. Ethereum’s address activity showcases its underlying strength, despite price declines. The performance of major cryptocurrencies varies, with some recovering from initial drops. As the market evolves, it is crucial for investors to closely monitor these dynamics and exercise caution in their crypto investments.
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