Altcoins
Top reasons why Bitcoin, ETH, XRP, ADA and SHIB are crashing today
The crypto market is bleeding on Friday, reducing the global market capitalization by more than 7% to $2.55 trillion. Bitcoin (BTC) and Ethereum (ETH) Price both fell more than 7% and other altcoins including BNB, XRP and Cardano (ADA) also fell.
Despite the meme coin hype these days, the prices of Dogecoin (DOGE) and Shiba Inu (SHIB) also saw big profits, falling 12%. Traders and analysts are predicting a much-needed capitulation for the market to continue to recover amid the Bitcoin halving.
Reasons why Bitcoin and Altcoins crashed
1. Friday Options Expiry
The market fell in response to the expiration of over $3 billion worth of Bitcoin and Ethereum options on Friday, March 15. The crypto market always witnesses huge volatility during options expiration.
Notably, 30,568 BTC Options with a notional value of $2.09 billion is set to expire today. The put-call ratio is 0.79 and the maximum pain point is $66,000, indicating a profit-booking scenario for options traders while remaining bullish. BTC Price fell to a low of $66,770, which is still above the maximum pain price. However, Bitcoin will see a recovery thanks to the dip buying opportunity.
Source: Déribit
In the meantime, 332,094 ETH Options with a notional value of $1.24 billion is set to expire, with a call-put ratio of 0.69. The maximum pain point is $3,550. Traders are particularly bullish on Ethereum, but have managed to make profits above the maximum pain point. ETH price rose to $3,748 after falling to a 24-hour low of 3,656.
Source: Déribit
2. Fed rate cut dampens hopes
The US Fed’s rate cuts will largely depend on new economic data, notably inflation and employment, said the Chairman of the US Federal Reserve, Jerome Powell, in his testimony before Congress.
After warmer CPI data earlier this week, higher PPI, retail sales and unemployment figures indicate higher inflation and resilience in the US economy. That gave the Fed more reason to delay cutting rates, mostly until the end of the year. The Fed will likely keep rates steady in March and May.
CME FedWatch data shows a 54% probability of a 25 basis point rate cut in June and a 47% probability of a 25 basis point rate cut in July. The US stock market fell after recent data, with US stock futures and global stock markets falling today amid market volatility and uncertainty.
US Dollar Index (DXY) rose from 102.85 to 103.40, the first gain in four weeks. Additionally, the 10-year U.S. Treasury yield rose for the fourth straight day to 4.28%, its highest level since the start of the month after strong PPI data dampened optimism about possible rate cuts of the Fed this year. Fed swaps now signal fewer than three rate cuts this year.
3. Crypto holdings liquidated amid liquidity surge
The crypto market recently saw over $680 billion in market value wiped. liquidations amid a rush of cash. Data from Coinglass indicates that more than 192,000 traders were liquidated in the last 24 hours, with the largest liquidation order being BTC-USDT swap valued at $13.30 million on the OKX crypto exchange.
Source: CoinGlass
Nearly $543 million in long positions and $137 million in short positions were liquidated, with Bitcoin and Ethereum seeing over $242 million and $115 million in liquidation. This caused the crypto market to hemorrhage, but it also provided a buying opportunity on the dip.
Popular Analyst Michael van de Poppe predicted a short-term liquidity surge amid the pre-Bitcoin halving rally. He added that bearish divergences over a shorter time frame appear to be valid and recommends buying altcoins on the decline.
4. Bitcoin ETF inflow slowing
WE Spot Bitcoin ETF There was a substantial decline in inflows, falling 80.6% to $133 million on Thursday, CoinGape reported. This includes the smallest capital inflow in the last eight trading days, as Wall Street sentiment weakens amid new economic data.
Investors took positions in Grayscale’s GBTC as the halving high took inspiration from the decline in the gold and stock market. GBTC recorded an outflow of $257.1 million on Thursday.
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