THE cryptocurrency market returns to the decline today after yesterday’s recovery, while the Bitcoin it temporarily touched its lowest level in a month and a half when it hit $59,573 earlier today.
This is the weak performance of the cryptocurrency market today as it approaches its event Bitcoin halving later today.
Historically, halving was bullish for bitcoin in the long term, but this was not necessarily the case in the short term. Although the heavy losses suffered by buyers may be enough to keep them off the scene temporarily, after liquidation of more than $2.3 billion of long positions in crypto futures from Friday until yesterday, according to CoinGlass.
Bitcoin has already enjoyed a rise of approx 200% since last September until mid-March, when it topped $73,000 for the first time. Therefore, the bulls will need more motivation to re-enter and it is not surprising to see more negative market sentiment in the coming days.
If we go back to the beginning of this April, we have witnessed the halving for Bitcoin Cash (BCH), the bitcoin “hardfork”, which enjoyed a 20% gain since April 3rd and reached the $720 level before retreating and losing 38% of this peak at the $480 level.
The next daysthe most important thing markets will look for, as usual, is more flows to spot bitcoin ETFswhich have seen net outflows over the past five sessions, while ETF net assets are near one-month lows.
THE willingness to take risks in the crypto market is also affected by macroeconomic developments and ever-escalating geopolitical tensions. As negative sentiment grows around the path of interest rates in the United States, with hope for the possibility of a gradual rate cut in the second half, as inflation accelerates. An additional effect is the atmosphere of regional war in the Middle East.