Cryptos Today: Cryptocurrencies Erase Gains After Wall Street Sell-off; indicator suggests a general exodus of investors

The cryptocurrency market started the week on a high, but was shaken on Monday (5) by the reaction of US stock markets to new stronger-than-expected economic data, reducing expectations for a drop in interest rates in the face of persistent inflation.

New York stocks retreated, with the Dow Jones, S&P 500 and Nasdaq indices falling 1.4%, 1.79% and 1.93%, respectively. The sell-off affected digital assets, but Bitcoin lost little ground and only dropped from $17,300 to $17,000 in the last 24 hours – thus maintaining the same support of the last six days.

The impact was felt most in smaller cryptocurrencies, which had risen stronger than BTC and dropped sharper earlier today. Ethereum (ETH), Binance Coin (BNB), XRP and Cardano (ADA) lost more than 2% each, and Dogecoin (DOGE) lost 6.2%.

“Bitcoin’s earlier gains evaporated after a strong ISM (Institute of Supply Management) services report fueled bets that the Fed could apply much greater tightening than markets are currently pricing in,” wrote Edward Moya, senior analyst. of Oanda market.

The Institute of Supply Management’s November Services Index has again fueled fears that the US economy will require the US central bank to manage a longer-term dosage of more severe than expected interest rate hikes in mid- November, when the Consumer Price Index (PCI) fell.

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The ISM services report comes just three days after a stronger-than-expected jobs data raised concerns that the US economy is not contracting enough, keeping fears of continued inflation firm.

BTC sustains $17,000 on Tuesday morning (6) supported by a breather among US investors, with Dow Jones, S&P 500 and Nasdaq futures advancing slightly at 0.12%, 0.16% and 0. 19%. According to analysts, the cryptocurrency seems to be trying to recover from the implosion of the FTX crypto exchange – without this crisis, a survey pointed out, the digital currency should be trading at $ 29,000. This brand, however, should take time to be resumed.

Watch: Chamber abandons law that would prevent “new FTX” in Brazil. And now?

For Glenn Williams, cryptocurrency analyst at CoinDesk, the recent decline in US consumer savings rates to the second lowest level in 60 years suggests that the crypto market is likely to remain static for at least the foreseeable future.

“As retail investors comprise a sizable portion of crypto investors, continued erosion in purchasing power is likely to weigh on BTC and ETH prices,” Williams wrote. “We face a cocktail of higher interest rates, diminishing purchasing power and rising debt levels.”

Analysts have been poring over the behavior of Bitcoin dominance, a metric used to measure the cryptocurrency’s share of the total pie in the market value of digital assets. In times of crisis, BTC dominance tends to skyrocket as investors exit positions in smaller cryptos and allocate to the largest crypto on the market.

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During the most recent crisis with FTX, however, Bitcoin’s dominance rate has stalled in the 40% range. But what would normally be seen as a positive sign, according to experts, could indicate a delicate moment for the sector: mass exodus of investors from the crypto market.

“BTC has not overcome the downside in recent months, so investors [de criptomoedas] no longer see it as a safe haven,” said Wes Hansen, director of trading and operations at crypto fund Arca.

On the other hand, Katie Talati, head of research at Arca, claims that cryptocurrencies have probably hit rock bottom. “I don’t do price predictions, but I think we’ve probably seen the bottom in terms of prices and market sentiment over the last few weeks,” Talati said.

Check out the performance of the main cryptocurrencies at 7 am:

Cryptocurrency Price Variation in the last 24 hours
Bitcoin (BTC) US$ 16,990.65 -1.90%
Ethereum (ETH) US$ 1,258.25 -2.90%
Binance Coin (BNB) $288.47 -2.30%
XRP (XRP) US$ 0.384097 -2.10%
Dogecoin (DOGE) US$ 0.100881 -6.20%

Cryptocurrencies with the biggest increases in the last 24 hours:

Cryptocurrency Price Variation in the last 24 hours
Synthetix Network (SNX) $1.92 +4.90%
Axie Infinity (AXS) $8.85 +4.00%
FraxShare (FXS) $5.21 +3.50%
Stacks (STX) US$ 0.263731 +2.70%
Chain (XCN) US$ 0.03927124 +2.00%

Cryptocurrencies with the biggest drops in the last 24 hours:

Cryptocurrency Price Variation in the last 24 hours
GMX (GMX) $51.22 -7.10%
Dogecoin (DOGE) US$ 0.100881 -6.20%
Kronos (CRO) US$ 0.066907 -5.80%
Nexus (NEXUS) US$ 0.658986 -5.40%
Shiba Inu (SHIB) US$ 0.00000934 -4.90%

Check out how cryptocurrency ETFs closed in the last trading session:

ETF Price Variation
Hashdex NCI (HASH11) BRL 15.79 +0.57%
Hashdex BTCN (BITH11) BRL 21.15 +0.95%
Hashdex Ethereum (ETHE11) BRL 19.40 -1.02%
Hashdex DeFi (DEFI11) BRL 18.00 +3.86%
Hashdex Smart Contract Platform FI (WEB311) BRL 12.25 -0.40%
Hasdex Crypto Metaverse (META11) BRL 31.50 +1.61%
QR Bitcoin (QBTC11) BRL 5.10 +0.39%
QR Ether (QETH11) BRL 4.41 -1.78%
QR DeFi (QDFI11) BRL 3.03 -0.32%
Crypto20 EMPCI (CRPT11) BRL 5.76 -3.83%
I invest NFTSCI (NFTS11) BRL 19.83 +10.03%
Invest BLOKCI (BLOK11) BRL 78.40 +0.03%

See the main news of the crypto market this Tuesday (6):

Goldman Sachs eyeing crypto companies

Goldman Sachs intends to spend tens of millions of dollars on crypto companies whose valuations took a hit after the FTX implosion, Reuters reported on Tuesday.

“We see some really interesting opportunities with much more sensible pricing,” Mathew McDermott, head of digital assets at Goldman, told Reuters.

Goldman sees a growing need for credible players in the sector, which banks see as an opportunity, according to McDermott.

The bank did not respond to CoinDesk’s request for comment by the time of publication.

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Bitcoin mining difficulty plummets

The difficulty to mine a Bitcoin block dropped 7.32% between yesterday and today, amid the movement of miners turning off machines due to the difficulty in maintaining profits with falling prices.

According to data from the BTC.com mining pool, it is the biggest drop since July 2021, when miners abandoned the network following the ban on the industry in China.

At the time, the country was the largest Bitcoin mining hub in the world.

The mining difficulty automatically adjusts according to the computing power of the network, aiming to keep the time needed to mine a block of Bitcoin practically stable, around 10 minutes. The more miners are working, the higher the difficulty.

Bitget releases proof of reservations

After promising last month, cryptocurrency exchange Bitget released on Monday (5) its Proof of Reservations, a tool that helps verify that customer deposits have liquidity.

Accompanying the market initiative to increase transparency in the sector, the solution is organized in a Merkle Tree, a kind of cryptographically audited diagram that shows balances in cryptocurrency wallets.

The broker provides monthly updated data and also allows users to audit their account balances themselves.

“The launch of Proof of Reserves and Merkle Tree data provide users with up-to-date and detailed information on Bitget’s financial situation, offering greater control over their assets held at the exchange,” explains Gracy Chen, managing director of Bitget.

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