Bitcoin falls to 10-week lows amid global geopolitical uncertainty

    BTC crashed below $35.500, leaving over $400 million worth of liquidated positions in the process and taking the entire crypto market with it. Last week, Bitcoin had also witnessed the major outflows from the market, totaling $120 million, as the uncertainty of institutional investors continued to grow. However, MicroStrategy promised to support Bitcoin in the case of a major “capitulation.”

    The total market cap lost around $150 billion in the past week as Bitcoin’s price crashed to levels that we last saw on the day Russia invaded Ukraine.

    Bitcoin’s price crashed to levels that we last saw on the day that Russia invaded Ukraine. Moreover, the entire market lost over $150 billion of its capitalization as the past 24 hours caused nothing but mayhem in the industry.

    Bitcoin’s price is down 9% in the past seven days, and it’s currently trading slightly above $36K. This time last week, the cryptocurrency was sitting slightly below $39K, and the week was going relatively well. The price managed to increase towards $40K, but unfortunately, everything took a turn for the worst yesterday.

    BTC crashed from $39.5K to $36K in less than a couple of hours, leaving over $100 million worth of liquidated positions in the process. At the time of this writing, the price has failed to recover. Interestingly enough, this happened as the Luna Foundation Guard (LFG) announced yet another purchase of $1.5 billion worth of BTC.

    Moreover, this took the entire market with it, although some altcoins are faring slightly better than BTC, whereas others lost more. Ethereum, for instance, is down less than 8%, while BNB is down 6%. ADA is down 7%. On the other end of the spectrum we have Solana, which lost 16%, DOT – down 16%, AVAX – 15%, SHIB – 13%, and so forth. Ultimately, this led to an overall pullback worth around $150 billion of the entire market cap.

    Meanwhile, Bitcoin had also witnessed the majority of withdrawals from the market in the previous week, totaling $120 million. With these losses, it was dangerously close to breaking its one-year outflow record, which was set in June 2021, when $133 million left the digital asset.

    Although, it was not the only asset to see outflows this week. Blockchain stocks, which had mostly defied the outflow trend, have finally fallen. It had a total of $27 million left as institutional investors’ unfavorable opinions continued to grow.

    Ethereum’s outflows have also persisted. The digital asset has lost a total of $25 million, bringing its year-to-date outflows to $194 million. This is the market’s fourth consecutive week of outflows. It now stands at $339 million, with $339 million having departed the market in the last four weeks. It also indicates a market-wide gloomy mood, since the Dread & Greed Index has dipped into the extreme fear zone.

    “The correlation between cryptocurrency and equities has been discussed fairly extensively after bitcoin and the tech-heavy Nasdaq 100 displayed a higher positive correlation than was initially expected,” Tammy Da Costa, DailyFX analyst, told The Street. “Over the past week, fundamentals have included interest rate expectations and nobody can ignore the ongoing war which continues to place pressure on supply constraints, particularly for commodities.”

    The Federal Reserve on Wednesday lifted its Fed Funds rate by 50 basis points, to a range of 0.75% to 1%, its largest rate hike in more than two decades.

    The central bank also confirmed plans to reduce its $8.9 trillion balance sheet, with $47.5 billion in sales starting on June 1 with a cap of its monthly asset sales at $95 billion, comprised of $60 billion in Treasury bonds and $35 billion in mortgage bonds.

    Although Bitcoin, Ether, and the “older” crypto’s have appeared fairly susceptible to these issues thus far, Da Costa said she believes “that interest rate hikes are likely to jeopardize the short-term potential for profits.”

    This said – It remains very interesting to see how the markets will fare in the coming week as global geopolitical uncertainty seems to be growing.

    However, amid growing calls for a “capitulation” style event to put in a fresh macro bottom on BTC/USD, contingency plans were also becoming conspicuously more vocal.

    MicroStrategy, the company with the world’s largest Bitcoin corporate treasury, stated that it would up its Bitcoin buys in such a scenario.

    Thus, MicroStrategy appeared to state that it would actively support Bitcoin markets during a major capitulation. As Cointelegraph recently reported, BTC price forecasts currently call for between $25,000 and $30,000 as a worst-case scenario.

    Leave a Reply

    Your email address will not be published. Required fields are marked *