Crypto market remains volatile, Bitcoin falls below $42,000

Crypto market overview: Bitcoin has lost more than 4.72 per cent in the last 24 hours while Ethereum has also lost close to 5 per cent over the weekend. The speculations of another rate hike by the US Federal Reserve drive the volatility in the crypto market. The worst hit in this market dip is taken by Toncoin which has suffered 8.30 per cent in the last 24 hours. 

Despite high volatility in the market, Crypto Fear and Greed Index have remained stable over the weekend by maintaining 74 points on the scale. 

While talking about the crypto market movement over the weekend, CoinDCX Research Team said, “Over the weekend, the crypto market maintained a quiet atmosphere, with some bullish movements in altcoins. However, as the new week began, Monday saw a sudden downturn – BTC plummeted by over 7 per cent, briefly dipping below $40,500 and touching the 20 EMA Daily. It swiftly recovered to $42,500. Simultaneously, ETH experienced an 8 per cent decline but managed a partial recovery above $2250. The abrupt market movement seems to be more of a correction or profit booking, considering BTC's eight consecutive weekly candle closures in the green.”

“Technically, key support levels for BTC are positioned at $40,600 and $37,800, while resistance levels are observed at $44,700 and within the $47,000-$48,000 range. For ETH, support levels are identified at $2,130 and $2,020, with resistance levels at $2,450 and $2,950,” CoinDCX added. 

Parth Chaturvedi, Investments Lead, CoinSwitch Ventures, also shared his crypto market insights with Republic Business. Chaturvedi said, “The week has started with corrections within the crypto market. As per the market data, the top 10 cryptos by market capitalisation are currently trading in the red. Most of the losses, however, have happened around 6 am onwards. These could be a result of liquidations of over $335 million over the last 12 hours, with $300 million in long positions, as per data from Coinglass. BTC continues to trade above $41,000, while ETH is trading above the $2,200 mark.” 

“In terms of blockchain-network-specific action, Chainlink's expanded crypto-staking program raised over $632 million in just six hours of the early access period last Friday; this also led to a surge for LINK. Simultaneously, Stabelcoin issuer Tether froze 41 wallets on Saturday as a precautionary measure. These wallets were held by individuals listed on the Office of Foreign Assets Control's (OFAC) Specially Designated Nationals (SDN) List,” Chaturvedi added. 

Underlining the significance of the US Fed’s interest rate hike decision, Rajagopal Menon, Vice President, WazirX said, “This week carries significant weight for the crypto market as the Federal Reserve is poised to make a pivotal decision on interest rate hikes. Contrary to the varied opinions among analysts in recent weeks, the prevailing consensus leans towards the Fed opting for a hiatus on rate hikes, a potential boon for the cryptocurrency sphere.” 

“Additionally, the forthcoming annual Consumer Price Index (CPI) data holds the key to unveiling inflation rates and influencing potential rate adjustments. In the event of the former scenario, the crypto market stands to benefit,” added Menon. 

Sudeep Saxena, co-founder, Coin Gabbar shared his understanding of teh reasons driving volatility in the market. Saxena said,  “In the early Asian session, Bitcoin faced a 7 per cent drop, briefly touching the $40,400 level, resulting in the liquidation of nearly $200 million in positions. With the upcoming US Consumer Price Index (CPI) and the Federal Reserve's interest rate decision this week, expectations are for sustained heightened volatility.” 

Edul Patel CEO of Mudrex said, “Bitcoin is currently priced at $42,000, facing increased take-profit and sell orders, triggering market-wide liquidations after hitting a new yearly high of $44,700 last week. Market dynamics are characterised by a battle between bulls and bears. A move above the $44,700 resistance may indicate a resumption of the uptrend, while a drop below might find support at the $40,600 level. Meanwhile, Ethereum has followed suit, declining approximately 4 per cent in the past 24 hours due to profit-taking by whales.”