Crypto saw a second day of losses after a weekend of almost breaking records. Global market cap is down 3.4%, according to Nomics, hovering around the $1.75 trillion mark.
The crypto mega caps were responsible for most of the losses. is down 4.5% at the time of writing, struggling to stay above $54,000.
faired slightly worse, dropping more than 5%. This will probably have something to do with the amount of Eth being held on centralized exchanges reaching a 19-month low, according to analytics company Glassnode.
— Bloqport (@Bloqport) March 22, 2021
That’s not all, the number of addresses holding more than 100+ coins is also at 19-month lows. There are also liquidity droughts on WBTC and DAI markets too, suggesting users are either preparing to buy the bottom of the dip, or sitting out this round of volatility with an eye on longer-term profits.
Previous 19-month low of 45,546 was observed on 21 March 2021
— glassnode alerts (@glassnodealerts) March 23, 2021
But further down than the cap tables, Ripple, buoyed by calls for the project to be relisted, surged by more than 10% overnight. Uniswap too, is up 5% and Theta Token, Market Watch’s star performer adds another 12% to its token price as it breaks into the top 10 cryptocurrencies for the first time.
What’s the reason for all this? It looks like the improving strength of the dollar has been having a negative impact on crypto. The accelerating US recovery is making the greenback a safe haven for investors, with USD making gains against GBP, the Euro, and the Japanese Yen. There’s also a sudden influx of dollar buying after the Turkish lira dropped 15% yesterday.
Historically, has advanced on the weakening dollar – as was the case last year. The trade spat between the EU, US and China also appears to be having an impact on investor sentiment.
This narrative is likely to create increasingly tough conditions for Bitcoin to thrive, as its status as an exotic growth asset is replaced by “only use if there’s nothing else growing”.
On Wall Street, the tech mega caps all saw strong gains thanks to a pullback in Treasury Yield growth rates. Apple was up 2.8%, Microsoft up 2.4%, and Tesla up 2.2%.
The toing and froing between growth and value stocks continued to turn yesterday. While tech stocks gained, airlines and travel companies, which had been gaining momentum in recent weeks on the assurance the world was getting back to normal, took a dive yesterday as COVID refuses to go away.
With Europe now facing up to yet another wave of COVID, the return to normality looks like it might be pushed back for another few months. Will this be good for crypto? That will depend if Bitcoin can continue to demonstrate its growth potential to investors with the stomach for crypto’s rollercoaster-worthy price movements.
News Source from Decrypt.co