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By Alex Kuptsikevich
Market picture
The sell-off in US stock markets affected global risk appetite late on Monday, reversing initial positivity. As a result, crypto market capitalisation fell 5.4% in 24 hours to 2.29 trillion, back near the weekend lows. The market is hovering near the lows of March. This is a key moment in choosing the marketâs direction for the coming weeks. A bounce out of this area will allow for the expectation of an early recovery to the recent highs. A dip below would likely trigger a broader liquidation of positions.
Bitcoin has returned to the area of the lows of the past seven weeks, coinciding with the 61.8% retracement level of the rally from the January lows. Like the crypto market, Bitcoin is choosing between a loosely controlled deepening of the decline or a reversal to growth. On the negative side, the 50-day moving average triggered resistance on Monday.
According to CoinShares, crypto fund investments fell by $126 million last week after inflows of $646 million a week earlier; the small outflow came after two weeks of growth in the index. Bitcoin investments decreased by $110 million, Ethereum - by $29 million, and Solana - by $4 million.
News background
If Bitcoin falls below short-term holdersâ support at $58,900, the market risks going into a bearish phase, said analyst and CMCC Crest co-founder Willie Wu. He noted that almost every cycle prior to halving has seen a bear phase due to the âoveraccumulationâ of the first cryptocurrency.
As a result of the Bitcoin halving, only 20 per cent of the worldâs mining companies will be able to maintain their revenues at levels comparable to the previous period, TheMinerMag calculated. As a result, the mining industry could lose around $10 billion a year of revenue.
After the halving, miners could potentially liquidate $5bn worth of Bitcoin inventory, putting pressure on the price, 10x Research warned. The overhang of this sell-off could last four to six months.
The Hong Kong Securities and Futures Commission (SFC) has approved applications to launch spot bitcoin and Ethereum-ETFs. Matrixport estimates that demand for Bitcoin-ETFs in Hong Kong will reach $25bn.
Bitcoin mining companies will try to mine the first block that appears after the halving to get an âepicâ satoshi with an estimated value of several million dollars, CoinDesk reported.
About the author
Alex Kuptsikevich is a financial market professional with 16-yearsâ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.
Disclaimer
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