Bitcoin Struggling at $28k
Cryptocurrencies are losing ground against higher chances of a Fed rate hike, a stronger dollar, and regulatory risk.
- Stronger-than-expected PMI indices in the US have increased the chances of a 25 basis point increase in Fed rates in May.
- The stronger dollar has driven down risky assets, including Bitcoin, and weakened bullish sentiment in gold.
- Coinbase CEO Brian Armstrong has indicated that the company may leave the US, which has raised concerns about the shrinking global crypto market.
Bitcoin has lost for the third day in a row. According to Coinglas data, leveraged positions worth nearly $160 million were liquidated in the past day, of which 80% were bullish bets. The value of liquidated positions on cryptocurrency derivatives this week has already exceeded $400 million. Data from Santiment shows that the number of leveraged positions in the crypto market has increased with the rising price of Bitcoin, driving optimism, but ultimately leading to a reversal in sentiment and a sharp correction. Other altcoins, including Ethereum, Ripple, and Litecoin, are also falling along with the largest cap BTC.
Higher-than-expected PMI readings in the US have increased the likelihood of another Fed rate hike, which the market currently values at nearly 90% probability. Hawkish statements by Fed members have also contributed to this increase. Gold, which was correlated with Bitcoin during the banking crisis, has also come under pressure. Due to regulatory uncertainty, the market may once again pay attention to the associated risks. Some US investors and traders may leave the decentralized market for safety reasons if Coinbase, the largest crypto exchange in the US, closes its operations in the country.
The Bitcoin chart, on an H1 interval, shows that bulls are struggling to defend the $28,000 level, and a drop below the 23.6% Fibonacci retracement of the uptrend that began in early March suggests that the next significant support level may only be at $26,700, where we see a 38.2% Fibonacci retracement. Source: xStation.