Cryptocurrency Market Update
The cryptocurrency market has shown strong performance this week, outpacing traditional markets, driven by reduced selling pressure. According to analysts, Bitcoin has surged more than 4% in the past 24 hours, trading above $68,000.
As of now, Bitcoin trades at $67,800, according to The Block's Price Page. The overall cryptocurrency market cap is $2.45 trillion, reflecting a 0.8% increase in the last 24 hours, as per Coinglass data.
With Bitcoin's price rise, the ETC Group’s Cryptoasset Sentiment Index has returned to a neutral stance after being slightly bearish for weeks. A report from the ETC Group highlighted that alleviated selling pressure, particularly in Bitcoin, has stabilized net outflows and ignited renewed buying activities on spot exchanges. The ETC Group noted, "The return of risk appetite is also due to Microstrategy (MSTR) reaching a new performance peak, indicating positive prospects for Bitcoin’s price."
In contrast, global equity markets struggled for stability on Wednesday. A weak orders outlook from ASML, a crucial player in Europe’s chip sector, adversely affected chipmakers, including Nvidia. By Tuesday’s market close, Wall Street pulled back from record highs, with the S&P 500 dropping 0.8% to 5,815.26—denoting the index's first decline after achieving an all-time high for the 46th time this year. The Dow Jones Industrial Average also dipped 0.8%, closing at 42,740.42, while the NasdaqComposite fell 1%, settling at 18,315.59.
The cryptocurrency market's breakout on Wednesday coincided with a significant spike in liquidations over the previous 24 hours. Total liquidations across centralized exchanges reached nearly $300 million, per Coinglass data. Bitcoin led these liquidations, with nearly $90 million in liquidated positions in the last day. About $65 million of Bitcoin's liquidations came from short positions.
Valentin Fournier, an analyst at BRN, shared insights: "The volatility triggered short liquidations for Bitcoin, with over $1 billion in shorts clustered just below $68,500. Any upward movement in Bitcoin price could ignite further liquidations and drive a decisive breakout from its current range."
MicroStrategy's net asset value (NAV) premium, calculated by dividing its market capitalization by the value of its Bitcoin holdings, has surged to the highest level in three years, standing at 2.7 times the value of its Bitcoin reserves. This marks a 188% rise in NAV premium since the beginning of 2024, showcasing robust investor confidence in MicroStrategy’s strategy of utilizing Bitcoin as a core asset.
A significant factor fueling Bitcoin’s performance is the increase in institutional inflows into spot Bitcoin exchange-traded funds (ETFs). U.S. spot Bitcoin ETFs have experienced substantial net purchases, surpassing $1 billion in the last three trading days, as reported by Farside Investors. Fidelity and BlackRock have spearheaded this buying frenzy, together attracting over $640 million in inflows this week.
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