The crypto market was initially trading lower on Monday, before cutting losses later in the trading day as sentiment improved. Market action came after heavy selling before the weekend on comments from US Federal Reserve (Fed) Chairman Jerome Powell last week, suggesting a 50 basis point rate hike may come later. Crypto market and falling stocks As of Monday at 14:40 UTC, bitcoin (BTC) stood at USD 39,304, unchanged in the last 24 hours and down 1% in the last 7 days. At the same time, ethereum (ETH) fell by 1% in one day and 3% in a week. Last week's bearish move followed Fed Chairman Powell's comments on Thursday, who said about interest rate hikes that "it is appropriate to move faster". The comments hit both the crypto market and the traditional market hard, with the broad S&P 500 stock index falling nearly 2.8% on Friday and continuing to decline on Monday morning. Likewise, BTC and major altcoins also suffered a steep drop on Friday, with the dips continuing in the crypto market throughout the weekend.
Commenting on Monday's market action, GlobalBlock cryptocurrency broker analyst Marcus Sotiriou said the USD 40,000 level for BTC is now failing after the Fed signaled more aggressive action is needed to stem the inflation. Sotiriou said "it is clear that the Federal Reserve has taken this aggressive stance, because consumers in the US are still spending substantially, which is a surprise after the Russia-Ukraine war." However, the analyst said he remained "cautiously bullish", since the rate hike of 50 basis points was already expected by the market, which, according to him, means that "it has already been priced to a large extent". "This could lead to a 'buy the facts' event on the day of [the Fed's] meeting on May 3-4," he said. China's blockades contribute to bearish sentiment In addition to the Fed's bearish comments, lockdowns in China also contributed to worsening sentiment among investors across all asset classes on Monday. Concerns follow what has been close to a month-long total blockade of Shanghai, China's most populous city and financial center, with growing fears that the nation's capital, Beijing, will be next to face the blockade, after groups of COVID-19 cases have been discovered in the city. Shanghai is home to one of the largest container ports in the world and the blockade has already caused a huge backlog at the port. According to analysts, the port disruptions could have implications for the entire world economy. Quartz reported Sunday that a new round of outages at the US port of Los Angeles, a major destination for containers from Shanghai, is likely to follow due to the backlog in Shanghai. Crypto market: peak in liquidations Unsurprisingly, the sale led to a spike in liquidations of bullish leveraged bitcoin positions, with $ 121 million clearing in the 12 hours from noon to midnight UTC on Thursday. Settlements once again saw a minor peak during the 12-hour midnight to noon UTC on Monday, when $ 44 million in bullish leveraged bitcoin positions were wiped out. Total BTC liquidations every 12 hours: Source: CoinGlass Launch of Australia's first spot ETF Notably, today's sale took place in the same week as the launch of at least two bitcoin-based ETFs (exchange-traded funds) in Australia. As previously reported by Cryptonews.com, it is estimated that the Cosmos Asset Management Bitcoin ETF will be available Wednesday this week on the Australian exchange CBOE. The product is essentially a fund of funds, as it invests in the CAD 1.4 billion (USD 1.11 billion) Purpose Bitcoin ETF listed in Toronto, Canada. Additionally, two funds launched by Australian ETF provider 21 Shares and ETF Securities are also expected to go live on the Australian stock exchange CBOE on the same day. The funds, one based by BTC and one by ETH, will be the first Australian ETFs to invest directly in digital assets.
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