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Crypto markets plunge into new round of sell-off as risk aversion heats up

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While correlations between cryptocurrencies and traditional assets are low, risk aversion from the Fed’s decision could spill over into the cryptocurrency space.

Original title: "Risk aversion rises, crypto market falls into new round of sell-off"

Original author: Mary Liu, BitpushNews

Bitcoin continued its decline on Tuesday, once falling more than $10,000 from last week's historical high to an intraday low of $62,320.30. Bitui terminal data showed that as of the close of the U.S. stock market that day, BTC's decline had narrowed, hovering at $64,000. Nearby, the 24-hour drop was about 5%.

Altcoin markets continue to fall amid weakness in Bitcoin, Ethereum falls Over 4%, it closed at $3,335.66, with SOL down 8% and Dogecoin down 5%. Most coins in the top 200 posted losses on Tuesday, with just six coins posting double-digit gains.

DeFi protocol Ondo (ONDO) led the gains with a 14.5% gain, followed by Fantom (FTM) with a 14.3% gain and Open Campus (EDU) with an 11% gain. Solana-based DeFi protocol Raydium (RAY) and Ethereum-based DeFi protocol Mantra (OM) were the biggest losers, down 18.6% and 13.8% respectively, while Jupiter (JUP) fell 12.9%.

Crypto stocks fell under pressure, MicroStrategy fell 5%, cryptocurrency trading Coinbase fell 4%, and crypto mining stocks initially fell across the board, but some closed higher, with the largest miners Riot Platforms and Marathon Digital falling 3% and 0.5% respectively.

Bitcoin began to weaken last week, and some investors took profits. Data from CryptoQuant shows that on March 12, there was a significant increase in the number of short-term holders selling Bitcoin at a profit.

Additionally, profit-taking has led to a surge in long liquidations of leveraged Bitcoin positions. According to CoinGlass data, in the past 24 hours, the long liquidation amount of various centralized exchanges was approximately 518 million U.S. dollars. Yesterday’s long liquidation amount was 122 million U.S. dollars, and the long position liquidation amount from Wednesday to Friday last week was approximately 372 million U.S. dollars. Dollar.

Bartosz Lipiński, CEO of Cube.Exchange said: “As ETFs are purchased on the open market As the available supply of Bitcoin continues to reduce liquidity, these situations may become more frequent and may cause people to lose confidence in the integrity of Bitcoin pricing and start looking to other crypto assets. Overall, this pullback is short-lived, and the resumption of the rebound makes sense - although the specter of a recession next year hangs over the market and could dampen the rebound in ways we may not foresee."

Bitfinex analysts said in a report: “Given Bitcoin’s recent all-time highs and subsequent correction, we expect the market to undergo a period of readjustment as investors respond to unprecedented inflows into spot Bitcoin. "Finding a balance in the context of cryptocurrency ETFs."

Joel Kruger, market strategist at LMAX Group, said in an email report, "The Fed's decision this week constitutes Risks include concerns that strong U.S. economic data and inflation will lead to a policy stance that is less friendly to investors. While correlations between cryptocurrencies and traditional assets are low, risk aversion from the Fed's decision could spill over into the cryptocurrency space. ”

Market analyst Bloodgood said in his latest market report: “There is still one month left before the Bitcoin halving, so considering Bitcoin’s recent performance, the pre-halving decline is no surprise. Meanwhile, all eyes are on tomorrow’s Federal Open Market Committee meeting, especially as the market appears to be reducing expectations for a rate cut this year, despite concerns over the current Fed The consensus on the rate decision is largely unanimous - that rates will remain unchanged - but any comments about the future direction of monetary policy will send shockwaves through the market. Of course, this means holding leveraged positions during the press conference The risk will be greater than usual."

The current total market value of cryptocurrency is US$2.39 trillion, and Bitcoin's market value dominance rate is 52%.