Bloodbath on Satoshi Street as Bitcoin (BTC) Tanks Under $33,000
Over the last weekend, the crypto market witnessed a brutal sell-off eroding more than $200 billion of investors’ wealth. As of press time, Bitcoin (BTC) is down 5.3% extending its weekly losses to more than 15%.
Over the last month, Bitcoin has been facing intense selling pressure amid the global macroeconomic developments of soaring inflation and Fed rate hikes. Many analysts expect that the Bitcoin price can go to $30,000 and even below.
Interestingly, Bitcoin (BTC) has taken a dive below its 100-day moving average (DMA) hinting at a major sell-off coming ahead. The last two times it happened in 2014 and 2018, Bitcoin witnessed a major sell-off post that.
Furthermore, the trader sentiment for Bitcoin has dropped to a six week low. These are major signs of capitulation wherein weak hands leave the space. The world’s largest cryptocurrency is already done 40% year-to-date and down by more than 50% from its all-time high of $69,000.
For this year, we have seen Bitcoin to be closely following the U.S. equity market and especially forming a strong correlation with the S&P 500. Just as the markets have been on a downward tailspin, so has been Bitcoin.
Last week, the Federal Reserve increased the interest rate by 50 basis points to control the soaring inflation. The U.S. inflation has touched a four-decade high and analysts are expecting further rate hikes by the U.S. central bank ahead this year.
Along with Bitcoin, the sell-off has been has been even more brutal. Ethereum (ETH) has been closely following Bitcoin moves this year and is currently trading 6% down under $2,400.
Similarly, other top ten altcoins have corrected anywhere between 6-10%. The biggest sell-off on the weekend was for Terra’s native cryptocurrency LUNA. The LUNA price has tanked more than 15% over the weekend slipping under $60.
Over the weekend, some whale entity sold a massive number of UST coins risking the stablecoin to de-peg from the USD. The UST stablecoin dropped to a low of $0.97. Due to algorithmic mechanise of the Terra blockchain, this triggered a massive sell-off in LUNA due to which its price corrected 15%.
The Luna Foundation Guard has initiated some corrective measures. The LFG Council has voted on two proposals: 1. Loan $750M worth of BTC to OTC trading firms to help protect the UST peg. 2. Loan 750M UST to accumulate BTC as market conditions normalize.