Key Points
- Bitcoin (BTC) and Ethereum (ETH) follow major stock indexes in a general correction, with $300 million liquidated from the crypto derivatives market.
- Analyst Markus Thielen warns of a significant price correction for stocks and crypto due to unexpected and persistent inflation.
The cryptocurrency market, led by Bitcoin (BTC) and Ethereum (ETH), has mirrored major stock indexes in Europe, Asia, and the United States in a general correction over the past day.
Approximately $300 million has been liquidated from the crypto derivatives market, mostly involving long threaders. Additionally, both Bitcoin and Ether prices have seen a decrease of around 5 percent in the past 24 hours, trading at about $63,326 and $3,087 respectively.
Global Stock Market Trends
In the United States, the Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite Index slipped 0.65 percent, 1.2 percent, and 1.79 percent respectively in the past 24 hours.
In Europe, the FTSE 100, DAX, and CAC 40 all dropped by around 1.3 percent in the past 24 hours. In Asia, the Nikkei 225, Asia Dow, and Hang Seng declined by about 2 percent in the past 24 hours.
The general wide market drop was largely attributed to the looming Middle East crisis between Israel and its neighboring countries. Furthermore, the ongoing conflict between Russia and Ukraine has already constrained the trade relations between major global superpowers.
Despite this, MicroStrategy Inc (NASDAQ: MSTR) founder and Chairman Michael Saylor has severely reiterated that Bitcoin thrives in crisis.
Analyst’s View on Crypto and Stocks
According to Markus Thielen, founder of 10x Research, most spot Bitcoin ETF investors have opted to watch from the sidelines due to ongoing market correction. The narrative of possible interest rate cuts in the United States, which has been a major driver of the recent bullish sentiment, is currently being challenged.
Thielen expressed concern that risk assets – stocks and crypto – are teetering on the edge of a significant price correction. The primary trigger is the unexpected and persistent inflation. With the bond market now projecting less than three cuts and 10-year Treasury Yields surpassing 4.50%, we may have arrived at a crucial tipping point for risk assets,” Thielen told clients on Tuesday.
As a result, Thielen noted that they sold all their tech stocks on Tuesday and currently only hold high-conviction crypto coins. The bearish outlook on risk assets like crypto comes amid ongoing regulatory scrutiny on altcoins by the United States Securities and Exchange Commission (SEC).
According to the US SEC, most of the altcoins fall under the securities law led by Ethereum and Ripple Labs-backed XRP.
Midterm Price Predictions
Bitcoin price has continued to range between $72K and $61K in the past few weeks, despite the notable gains in the dominance against the altcoin industry.
Crypto analyst Michael van de Poppe suggests that Bitcoin price has found a solid support level around $61,441, whereby the bulls must defend at all costs to avoid capitulation towards $55K.
