Cryptos slip as Bitcoin (BTC), Price Struggles at 40K

On Friday, most cryptocurrencies traded lower than equities due to losses.

Bitcoin (BTC), which is the largest crypto currency by market capitalization in the world, dropped below $40,000, the middle of a three month price range. Choppy trading conditions are a sign that traders are uncertain, especially when geopolitical and macroeconomic risk linger.

Due to the increased correlation between BTC-stocks, investors are more aware of the effect of rising interest rate on asset values. This is similar in nature to what happened in 2014-2018. This could lead to some buyers staying away, which would indicate lower market returns, particularly when compared to the two previous years of unprecedented fiscal and monetary stimulus.

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Alternative cryptocurrencies (altcoins), saw a lower drop than bitcoin on Friday. This suggests that the current dip in prices may be temporary. Due to their higher risk than bitcoin, altcoins are often underperformers in a market selloff.

Technical indicators suggest that bitcoin could stabilize around $37,500 despite signs of slowing price momentum on the charts.

Current prices

●Bitcoin (BTC): $39510, −4.05%

●Ether (ETH): $2961, −2.08%

●S&P 500 daily close: $4272, −2.77%

●Gold: $1935 per troy ounce, −0.52%

●Ten-year Treasury yield daily close: 2.91%

Prices for bitcoin, ether and a variety of other commodities are taken around 4pm New York Time. Bitcoin is the CoinDesk Bitcoin Price Index XBX; Ether is CoinDesk Ether Price Index XTX; Gold is the COMEX spot rate. 

Volatility drops makes traders cautious

The chart below shows the decline in bitcoin’s implied volatilty. This makes it difficult for some option traders to profit from unexpected price swings.

Traders have been able to position themselves for short-term volatility spikes and downside risk, particularly around key announcements.

Arthur Hayes, cofounder of BitMEX’s crypto derivatives trading platform, forewarned about this on April 10. BTC price crash toward $30,000. It could reach $30,000. QCP Capital, a Singapore-based cryptocurrency trading company.

“At the same time, the recent proliferation of algorithmic stablecoins seems to have placed a soft floor in the market,” QCP wrote in a Telegram announcement. Although this has given some relief to crypto markets it is still uncertain if the model will be sustainable over time.

Over the past few days, Bitcoin’s put/call ratio dipped slightly. This indicates that options traders are feeling less bearish.

Other markets

The majority of digital assets in CoinDesk 20 ended the day lower.

Top Gainers

CoinDesk 20 is not for everyone today.

Top Losers

Asset Ticker Returns Sector
Bitcoin BTC −4.3% Currency
Cardano ADA −3.6% Smart Contract Platform
Litecoin LTC −3.5% Currency

The following provides information on the classification of sectors. Digital Asset Classification Standard (DACS).CoinDesk Indices created, which provides a reliable, comprehensive, standardized classification system to digital assets. 

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