Crypto Market Sinks Amid Global Economic Uncertainty

Crypto is having a dismal day, fighting a withering stretch of headwinds. The total market cap of cryptocurrencies stands at $2.33 trillion, down 4.81% in the past day, according to CoinGecko. Meanwhile, April is now the first month since January in which the Crypto Fear and Greed Index has returned to neutral territory, canceling the overall greedy mood of 2024.

Tuesday trends are overwhelmingly bearish, with every coin in the top 100 showing negative performance over the past 24 hours.

Unus Sed LEO (LEO), is down 0.19% and is still the best-performing token of the Top 100, with a current price of $5.84, followed by Cronos (CRO) which is down 0.05% at $0.1296%. In general terms, right now all of the 100 most valuable cryptocurrencies by market capitalization are registering losses, with SEI (ranked 57th in the top 100) being the worst performer, down 12.95 % in the last 24 hours.

Bitcoin, the crypto market’s bellwether, is also down, plunging to $60,000 today, dragged down by over $300 million in liquidations. The coin is changing hands at around $60200 for a -4.19% loss in the last 24 hours and -9.72% in the last 7 days.

In technical analysis terms, the coin’s compression period, which began on April 9, 2024, has been broken, and the failure to breach the $71.5K resistance point has led to a series of lower highs, culminating in today’s bearish movement.

Image: Tradingview

The EMA 10 and the EMA 55 for Bitcoin are touching, meanwhile, indicating the beginning of a death cross, in which the EMA55 turns higher than the EMA 10. This suggests that traders would need to hold the asset for longer to become profitable. The bearish forecast is thus still in play, with possible support near $60,000 —its current price (white line) before testing new minimums at around $52K (yellow line). The most immediate bullish scenario would simply cancel today’s losses without showing much strength in the short term.

Ethereum, the second-largest cryptocurrency, is mirroring Bitcoin’s downtrend, with today being the strongest red candlestick since April 13. The coin went from $3,164 to its current price of $2,966, down 6.26% in the last 24 hours and 8.18% in the last 7 days. The indicators for Ethereum are also bearish in a compression zone in the short term.

Price of Ethereum
Image: Tradingview

The indicators for Ethereum suggest a bearish short-term outlook, with a possible bounce in longer timeframes. The death cross occurred two weeks ago, and the coin is currently in a zone of major trading volume. The Average Directional Index (ADX) shows that the bearish correction is losing strength, hinting at a potential “squeeze” or switch from a strong bearish trend to a short bullish bounce.

The current bearish trend, if maintained, could make ETH break its current support and take the coin somewhere near $2,500, which is a strong support both in the daily and weekly timeframes. If a bullish bounce occurs, the coin could recover to $3,260 and still remain in the compression zone.

It’s not just crypto

The crypto market is largely responding to global trends, with most international markets also down today, attributed to a combination of factors like concerns about the US Federal Reserve’s next interest rate decision, uncertainty surrounding corporate earnings, and anticipation of significant macroeconomic events.

“The latest selling pressure in the U.S. financial market shows adjusted expectations about a possible number of rate cuts until the end of the year,” Ruslan Lienkha, chief of markets at YouHodler, said in statements shared with Decrypt. “The unchanged rate would not directly impact the crypto market anyway, but Powell’s rhetoric may continue to spread a risk-off signal around markets that might intensify selling pressure in the crypto market.”

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Image: Finviz

Investors are closely tracking the Federal Reserve’s stance on rates, with the central bank’s two-day monetary policy meeting underway with a decision and press conference scheduled for tomorrow.

Evolution of the SP500
Image: Tradingview

Further ahead, updated inflation metrics and the next U.S. jobs report will be key factors influencing market sentiment, with nearly 200 companies in the S&P 500 set to report their results this week. April has been the only bearish month for the S&P500 since October 2023.

The Fear and Greed Index for stock markets has entered the fear phase for the first time since October 2023. This also impacts the crypto market—especially now that Bitcoin is part of more trading portfolios following the approval of spot ETFs.

Edited by Ryan Ozawa.

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