Bitcoin was down 3.1% on Tuesday, ending the day around $20.3K, where it is consolidating on Wednesday morning. Ethereum has lost 3.1% in the past 24 hours, leading other altcoins down 1.9% (Cardano) to 6.9% (Shiba Inu). Total cryptocurrency market capitalisation, according to CoinMarketCap, fell 2% overnight to $911bn. Bitcoin’s dominance index remained at 42.5%. The Cryptocurrency Fear and Greed Index was up 3 points to 13 by Wednesday and remains in a state of “extreme fear”.
Bitcoin declined on Tuesday following the US market, where the bears reigned the upper hand again, taking more than 3% from the Nasdaq index.
The local technical picture is rather worrying. The recent bounce might have been enough to consolidate the bearish forces before a new attack. Traders should be ready for the new test of lows at 18K before the end of this week if moods on financial markets don’t reverse.
According to CoinShares, capital outflows from crypto funds last week amounted to the all-time high at $423 million, with almost all funds withdrawn coming from bitcoin-based products. The driver was the launch of ProShares’ first US bitcoin inverse ETF, which allowed investors to open short positions in the cryptocurrency. Simply put, the institutions that have been such a significant driver of Bitcoin and Ether’s growth in the previous couple of years are now selling off these assets, putting additional pressure on the entire market.
What the crypto market lacks currently is long-term institutional HODLers. Bank of America said concerns about the crypto winter had not cooled investor interest in the industry.
SEC chairman Gary Gensler clarified his stance on bitcoin in an interview with CNBC, calling it a commodity. MicroStrategy CEO Michael Saylor said it would allow politicians and governments to support bitcoin as a technology and digital asset. According to a Mastercard survey, in Latin America, 51% of the payment system’s card users have bought cryptocurrencies. About a third of respondents invested in stable coins. Investments in NFT and DeFi projects are pretty popular.
