The latest moves in crypto markets, in context By Jamie Crawley, CoinDesk news reporter Was this newsletter forwarded to you? Sign up here. |
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Happy Wednesday! Here's what you need to know today in crypto: |
- Bitcoin falls below $58,000 before Fed interest-rate decision.
- Binance founder CZ handed four-month prison sentence.
- SEC Chair Gensler accused of misleading Congress over Ethereum.
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CoinDesk 20 Index: 1,996 −5.3%
Bitcoin (BTC): $57,444 −6.2%
Ether (ETC): $2,879 −4.7%
S&P 500: 5,035.69 −1.6%
Gold: $2,305 +0.6%
Nikkei 225: $2,305 +0.6% |
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Bitcoin (BTC) sank below $58,000 during the European morning on Wednesday to the lowest level since the end of February. BTC has fallen around 6% in the last 24 hours having dropped below the $60,000 support level late on Tuesday. The wider crypto market, as measured by the CoinDesk 20 Index (CD20), has lost more than 5%. Cryptocurrencies have been dogged by risk-off sentiment in the broader financial markets amid a stagflationary feel in the U.S. following indications of slower growth and sticky inflation that have tapered hopes of an interest-rate cut by the Federal Reserve. The Federal Open Market Committee is due to give its latest rate decision later today. |
Binance founder Changpeng "CZ" Zhao was sentenced to four months in federal prison on Tuesday having pleaded guilty to charges of enabling money laundering at the crypto exchange. The relatively lenient punishment (prosecutors had sought a three-year sentence) could be attributed to the positive image of the man that his defense lawyers had crafted as a philanthropist, family man and first-time lawbreaker. U.S. Judge Richard Jones said he didn't think he'd "ever seen a volume of letters" of support from friends or family for a defendant, such that the book in which they were contained literally fell apart. SEC Chair Gary Gensler was accused of misleading Congress by Rep. Patrick McHenry, the chairman of the House Financial Services Committee, who said Gensler's agency already knew it considered Ethereum's ether a security before he attended a hearing and declined to answer that question. "Chair Gensler refused to answer questions regarding the SEC's classification of ether," McHenry said in a statement posted on X on Tuesday. "New court filings show this was an intentional attempt to misrepresent the commission's position." The classification of ETH is a major question hanging over the U.S. oversight of digital assets. If ETH is a security that should be registered and regulated by the SEC, then many other tokens may also fit that definition. |
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Market Insight: Bitcoin's Fall Below $58K Could See Further ETF Unwinding |
BTC's fall below $58,000 brings it into the range of the average $57,300 entry price of U.S. bitcoin ETF buyers, meaning there could be further downside in the immediate future. The closer the spot price of bitcoin is to the average entry price, the greater the likelihood of further ETF unwinding, according to Markus Thielen, 10x Research CEO. "There might have been a lot of 'TradeFi' tourists in crypto – pushing longs until the halving – this time is now over," Thielen said. "We expect more unwinding as the average Bitcoin ETF buyer will be underwater when Bitcoin trades below $57,300. This will likely lower prices to our target levels and cause a -25% to -29% correction from the $73,000 top – hence our price target of $52,000/$55,000 during the last three weeks." |
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- The chart shows that BTC's price is now below the average ETF purchase level.
- This means that more than half of spot ETF positions are underwater, and the risk of their liquidation must be considered.
- The break below $60,000 therefore re-opens a route to the $50,000-$52,000 range.
- Source: Standard Chartered
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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