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Bitcoin's April prediction
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Rising Treasury Yields cause Bitcoin to fall sharply, altcoins follow suit
Key points:
Bitcoin and the broader crypto market are facing headwinds due to rising Treasury yields.
Market expectations for a Fed rate cut in May or June are diminishing.
News - Bitcoin continued to register a decline on Wednesday, hovering around $66,271, at press time, as concerns over rising interest rates and delayed rate cuts by the Federal Reserve weighed on investors’ sentiment.
The broader cryptocurrency market mirrored Bitcoin's weakness, with Ethereum sliding below $3500 and major altcoins noting a weekly change on the negative side.
What’s the reason behind this sudden fall?
The primary reason behind the downturn was the recent surge in Treasury yields. The yield on the 10-year Treasury note reached a two-week high of 4.40% overnight, fueled by persistent inflation fears and surprisingly strong US manufacturing data.
Market expectations for Fed rate cuts seem to be shifting as well. Platforms like Polymarket indicate a near-certainty that the Fed will maintain rates after their May meeting, with bets on a June cut split evenly and a higher likelihood of a rate cut happening later in the fall. The CME Fed Watch tool reflects a similar sentiment, with a 97% chance of steady rates after May.
Bitcoin’s spot ETF noted a significant outflow on 1 April, thus, influencing bearish market sentiment.
On-Chain data evaluation - On-chain data reveals a further sign of potential investor nervousness. Over $245 million in long positions were liquidated across the crypto market in the past 24 hours, with Bitcoin taking a significant hit of $60 million in liquidated long positions. In April, BTC could see more drawdowns.
As per Greg Magadini, Director of Derivatives at Amberdata, the current market positioning, being so extended, is setting the market up for a very interesting “sell-the-news” halving cycle play. Until halving, the market can continue favouring longs “but it’s still a hard call given the market is already so invested.”
SEC Commissioner urges transparency amid controversial crypto custody guidelines
Key points:
SEC Commissioner Hester Peirce criticized the agency's crypto custody guidance, specifically SAB 121.
Peirce argued SAB 121 discourages banks from entering the crypto custody space.
News - Hester Peirce, a U.S. SEC Commissioner and prominent crypto advocate, has reignited criticism of the agency's approach to cryptocurrency regulation. In a speech at the SEC Speaks Conference, Peirce, known as "Crypto Mom" by enthusiasts, aimed at the SEC's stance on crypto custody.
What did Peirce focus on?
Peirce's primary target was Staff Accounting Bulletin 121 (SAB 121), a 2022 SEC guideline outlining accounting procedures for institutions handling crypto assets. She argues that SAB 121, issued without industry input, discourages established banks from entering the crypto custody space due to its stringent capital requirements.
She further warned that under SAB 121, if a crypto custodian fails, client assets could be treated as belonging to the failed entity, not the clients themselves. This raises concerns about investor protection in the event of a crypto custody failure.
Peirce's criticism extended beyond SAB 121. She lamented a broader shift within the SEC, accusing the agency of becoming less receptive to public engagement, particularly regarding emerging technologies like crypto.
In conclusion, the Commissioner urged the SEC to return to open communication, provide clear regulatory guidance, and foster responsible innovation, including in critical areas like crypto custody.
Lido shuts down Solana service, leaving users trapped with millions
Key points:
Over $21 million worth of SOL tokens are locked in Lido's discontinued Solana staking service.
Lido's exit from Solana DeFi hasn’t affected the overall network, which continues to grow.
News - Solana users are facing a frustrating situation after over $21 million worth of their tokens became trapped within Lido's staking protocol. This incident highlights potential risks associated with DeFi platforms.
What’s the backstory? Lido, a prominent DeFi player, allows users to stake their cryptocurrencies for rewards in exchange for representing tokens usable across various DeFi platforms.
In October 2021, Lido announced the closure of its Solana service, followed by the removal of its stSOL (Lido Staked Solana) token and the user interface for exchanging stSOL back to SOL. While Lido officially ended support in February 2022, over 112,000 SOL tokens, valued at roughly $21 million based on current market prices, remain locked, impacting over 31,500 users according to Solscan data.
Lido’s reply to the issue - Lido justified the closure as a necessary step to prioritize the success of its broader protocol ecosystem. However, the situation worsened due to a bug discovered in Lido's smart contracts, preventing users from withdrawing their staked SOL. This technical glitch, coupled with the removal of the user-friendly interface, has forced users to interact directly with code – a daunting task for those with limited technical expertise.
Lido's community channels are filled with criticism regarding the confusion and perceived neglect faced by stSOL holders.
XRP liquidations surge to $6 million following market downturn
Key points:
XRP market suffered heavy losses with $6 million in liquidated contracts. Long positions accounted for most liquidations.
The coins Funding Rate remained positive despite the price drop.
News - The XRP market reeled from a brutal sell-off in the past 24 hours, with a staggering $6 million in liquidated contracts. This liquidation spree followed a sharp price drop on 1 April, mirroring a broader market correction triggered by Bitcoin's fall below $67,000.
The breakdown of liquidated contracts revealed a heavy hand on bullish bets. Long positions, representing traders who bet on a price increase for XRP, accounted for $5.6 million of the liquidated funds. Conversely, short positions, profiting from price decreases, saw significantly lower liquidation at $324,230.
What’s more? XRP trading volume surged by 58.69% during the same period. Most of the volume likely concentrated on selling XRP rather than accumulating it.
This trend, with rising volume accompanying a falling price, suggests a strengthening downward momentum for XRP. If this pattern persists, the token could see a further drop towards the $0.55 support level.
While the overall sentiment leans bearish, some analysts like CrediBULL Crypto maintain a bullish outlook for XRP. Based on technical analysis, CrediBULL Crypto believes XRP could experience a strong upside surge, potentially reaching $0.74 in the short term, with support at $0.55.
More stories from the crypto ecosystem
Did you know?
Dogecoin is the first ever memecoin which was created in late 2013. And memecoins have surged in popularity after Elon Musk endorsed the use of Dogecoin.
Cardano has been in the top ten cryptos since it launched. The cryptocurrency was founded by Charles Hoskinson, one of the co-founders of Ethereum.
Ethereum was crowdfunded since the coin's founders didn't have enough money and, they didn't want to take the Venture Capital route. The crowdfunding campaign was also a huge success.
Top 3 coins of the day
Solana (SOL)
Key points:
Solana’s Open Interest (OI) increased by 1.64% over the last day.
The coin’s weekly price change hasn’t been profitable for the most traders.
What you should know - Solana didn’t escape the recent crypto market downturn. After a strong run that pushed it above $160 in the second week of March, SOL has fallen alongside Bitcoin, currently hovering around $187. Technical indicators suggest a potential short-term pullback. The Relative Strength Index sat near 56, indicating neither overbought nor oversold territory, but a downward trend. However, Solana's fundamentals remained strong. Its DeFi presence continued to grow. its near-term price direction hinges on Bitcoin's recovery. If Bitcoin rebounds, SOL could follow suit and potentially retest its recent highs. However, a sustained Bitcoin decline could drag SOL lower, with potential support around $150.
Bitcoin Cash (BCH)
Key points:
BCH volume has gone up by a significant margin after 21 March.
In the past 24-hours, long liquidation dominated the shorts.
What you should know - Bitcoin Cash stood out as a beacon of green amidst a sea of red in the crypto market. At $605, it boasted a surprising 23.10% gain over the past week, defying the broader downturn. This momentum was further supported by the bullish MACD indicator, where the blue line sat above the orange line. It suggested a potential for continued upside in the near term. However, it's important to acknowledge that BCH's rally comes against a backdrop of overall market weakness. So, keeping an eye on Bitcoin's price action is crucial. While the reason behind BCH's surge remains unclear, some speculate it could be tied to the upcoming Bitcoin Cash halving on 4 April.
Polygon (MATIC)
Key points:
MATIC’s weighted sentiment, at press time, was negative.
Key indicators suggested that further drawdown could be on the cards.
What you should know - MATIC has been facing conflicting signals. While it managed a small 1.43% daily gain, reaching $0.908, the past week has been dominated by bears, reflected in a 12% decline. The negative Chaikin Money Flow (CMF) of -0.13 indicated weak buying pressure, further highlighting the bearish dominance. Technically, the daily gain offered a temporary reprieve, but the overall trend lacked momentum. For a bullish reversal, MATIC needs to overcome selling pressure and surpass its weekly resistance level of $1.07. Bitcoin's price movement will also significantly influence MATIC's direction. If Bitcoin rallies, MATIC could experience a positive spillover effect.
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