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Crypto market bloodbath – Why is everything falling apart?

TL;DR

  • The crypto market has tanked amid investor worries tied to the upcoming CPI report and the state of the U.S. economy, leading to derisking maneuvers.
  • Cryptocurrency prices are down, and the global market cap is losing millions in liquidation. BTC is trading at around $69K, while Ethereum hovers around $3,500.
  • Traditional markets are also taking heat from the expected readings today, April 10th, and other market data tomorrow (April 11th, 2024).

The crypto industry market is trading in the red today. This has been a hefty blow to crypto investors. Oftentimes, such downturns cover the weekend section amid the historical negative trading hours. Wall Street is not closed today, but crypto ecosystems are shutting down. The question is, why?

Crypto markets in the RED!!

The crypto market is down today, with the overall industry market cap falling in double digits amid heavy liquidations. At this time of writing, the global crypto market cap sits at $2.73 Trillion. This is a 2.96% drop in the last 24 hours. Bitcoin (BTC) has a $1.36 trillion market share per the current market share. This represents a Bitcoin dominance of 50.04%. 

CoinGecko data shows that Stablecoins’ market cap trading is at $155 billion and has a 5.69% share of the entire crypto market cap. On the other hand, Bitcoin (BTC) is trading at $69,018.58 today, signifying a 3.4% decline since yesterday. 

Ethereum (ETH), the second largest crypto coin, is worth $3,503.48 today, showcasing a 5.4% decline since yesterday. Furthermore, the Bitcoin Fear and Greed Index stands at 78. This indicates extreme greed among investors.

Today’s CPI data (April 10th) is another major factor contributing to the falling crypto prices. Commenting on the market reaction, CNBC analyst Sara Min pointed out that today’s U.S. inflation data stands to spark a major move in risk assets. Traders are on edge without a clue about how the FED (Federal Reserve) will proceed with interest rates.

The CPI worrisome data is not all there is. Investors await PPI, Jobless claims, and the ECB interest rate decision on April 11. The CME FedWatch Tool anticipates a 42.3% possibility of keeping the Fed funds rate unchanged in June. CME leaves chances of a rate cut at 56.2%.

According to economic data by Dow Jones, the March CPI reading is expected to see a 0.3% increase month-on-month and a 3.4% rise on a yearly basis. Analysts forecast data shows that Core CPI, which excludes food and energy prices, will surge by 0.3% and 3.7%, respectively.

The crypto market faces a market cycle different from the last bull runs. This can be attributed largely to the launch of spot Bitcoin ETFs and the upcoming Bitcoin supply halving.

Despite the BTC ETFs approval by the SEC, these spot trades have witnessed struggle from the get-go. On-chain data recorded recently shows that the net capital flows into all the spot Bitcoin ETFs turned negative at $233.8 million.

Slowing Bitcoin ETF inflows indicates a slowdown in investors’ risk appetite. However, all trading and investment hope is not lost. And why is that?  DeFi investors remain optimistic about the crypto market’s positive potential before and after the BTC halving event, which is about 10 days away.

CPI data details to expect today

Crypto is not the only market experiencing massive losses ahead of the CPI data. The Dow Jones Industrial Average saw a flatline, while the tech-heavy Nasdaq Composite increased about 0.3%. On the other hand, the S&P 500 basis surged more than 0.1%.

Elsewhere, Boeing shares fell as much as 2.5% on Tuesday. This follows a report from the New York Times that the Federal Aviation Administration is investigating safety claims made by a Boeing whistleblower.

Crypto and traditional Wall Street Investors are not convinced that the Fed will deliver on the 3 rate cuts it has projected for 2024. This comes on the persistent heels that show of strength in the US economy. 

The present dollar performance has intensified the focus on the CPI print for March. Note that any sign that inflation has begun to cool again will be seen as an invitation for a June policy shift. 

Amid the many losses and market winters, the fading rate-cut hopes have helped push up the 10-year Treasury yield near 5-month highs. What’s more? Analysts expect today’s CPI report to show that core prices rose 3.7% year-over-year.

The expected data is a slowdown from the 3.8% increase seen 2 months back in Feb. Monthly core price increases are expected to clock in at 0.3%, slower than the 0.4% increases witnessed in January and February.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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