Bitcoin and Ether started the trading day in Asia in the red, with Bitcoin falling 2.5% to $24,330 and Ether falling 3.7% to $1,649. Liquidity is on everyone’s mind, especially in the face of record withdrawals from the Treasury’s general account during the Covid period, and even more so after the bankruptcy of Silicon Valley Bank.
More recently, the Federal Deposit Insurance Corp. appears to have been bullied into replacing $40 billion in cash it took from TGA, which was originally intended to help ease market turmoil following the closing of SVB. . As Reuters reported recently, in the last week TGA lost almost $100 billion before the FDIC returned its $40 billion.
“The TGA was reduced in 2023 and this has helped the market in general, including bitcoin. But at the end of the last five days, the TGA had nothing to do with Bitcoin working properly,” Mark Connors, head of research at 3iQ, told CoinDesk in a note.
“There is little confidence that bitcoin news is not only negative, but confirmed at a level we have never seen before.”
Connors says it’s a matter of confidence for the Fed. “When you see the Fed creating a bubble, bursting the bubble, and then not knowing what game to play with inflation, or stabilizing the money market, which does not inspire confidence,” he continued.
The bigger issue at hand is rate volatility, according to Connors, and the market hates uncertainty. “The reason it’s important is that rates are used to pay for everything on the planet,” he said. “But when you’re not sure about interest, you’re not sure about everything that’s worth it.”
Higher-than-usual market volatility affects both bulls and bears as crypto futures surged $300 million in liquidity in 24 hours on Wednesday. Liquidation refers to when the exchange closes at the seller’s discretion due to the loss of the original part of the customer or is complete. This happens when the trader is unable to meet the requirements for the target position (not enough money to keep the trade open). Large selloffs can indicate a high or low level of a large price range, which can allow traders to position themselves in its position.
Bitcoin and ether rose overnight to above $26,000 and $1,770 respectively on Tuesday as investors shrugged off the long-term impact of regulatory measures on crypto-friendly banks and consumer price index data. (CPI) in the United States indicates an impending drop in inflation. moon. Bitcoin’s weekly chart shows the cryptocurrency again struggling to establish itself above $25,000, which capped the value last month in August 2022. According to the book Market Technician Aksel Kibar , a break above $25,000 will change to – focus next problem at $28,600 . “All About Bitcoin” host Christine Lee broke the “Chart of the Day”.
But the euphoria was short-lived as both major indexes fell 5% from Tuesday’s highs before slowing. On Wednesday morning in Asia, bitcoin was trading below $25,000 while ether was trading slightly above $1,700. The exchange resulted in a loss of more than $140 million in bitcoin futures and $80 million in ether futures. Of this total, 58% of futures losses came from short positions or bets against price increases, while the rest came from long positions or bets on price increases, which means that sellers short and tall customers are planting almost the same amount. Among other key indicators, Conflux’s CFX token futures and Filecoin’s FIL have $8 million and $5 million in liquidity, respectively, as trading volumes for both have increased in key developments.
Meanwhile, some market watchers said the price came as investors were looking for another asset after the collapse of Silicon Valley Bank last week. “Bitcoin’s rally to a new year high as Silicon Valley Bank tumbles and inflation remains strong shows that investors are looking for bitcoin stability in highly uncertain market conditions,” Alex Adelman, Co-founder of Bitcoin Bitcoin Lolli reward application, says CoinDesk.
“Although many people look at bitcoin as a hedge against inflation and follow its price changes, the relationship between bitcoin and traditional money is complex,” Adelman said, adding that bitcoin works like \” other than the traditional money. system in general. “
“Weakness in the banking sector has led investors to recognize the unique value proposition of bitcoin. In the coming weeks, we will continue to see the rise of bitcoin as the leading method for securely holding and transferring money,” Adelman said.