Business News/ Markets / Cryptocurrency/  Bitcoin falls below the psychological mark $29k. Why investors are bearish?

Bitcoin falls below the psychological mark $29k. Why investors are bearish?

The cryptocurrency market witnessed a steep downside in value, however, volumes picked up. Bitcoin's dominance dropped, while Elon Musk's Dogecoin rallied sharply. Ethereum and BNB were also in the red.

UK inflation data for March escalates concerns about continuation in rate hikes in upcoming policies, which dampened crypto markets mood.  (AFP)Premium
UK inflation data for March escalates concerns about continuation in rate hikes in upcoming policies, which dampened crypto markets mood. (AFP)

The cryptocurrency market was on the hotbed, slipping by over 3% in the last 24 hours. The leader of the market, Bitcoin witnessed a steep selloff to even erase its psychological mark of $29,000. However, the volumes surged despite the valuation falling of the market. UK inflation for March came as a spoilsport for the market as fears of rate hikes to continue in upcoming policies dampened the mood.

At the time of writing, on CoinMarketCap, the global crypto market stood at $1.22 trillion down by 0.71% over the last day. On the contrary, the total volumes surged by 10.35% to $57.11 billion.

Bitcoin is among the top trending cryptocurrencies on Thursday, and things didn't look quite good for it. BTC's dominance dipped by 0.18% over the day to come to around 45.99%.

The largest cryptocurrency traded at $28,869.36 down by 1.7% in 24 hours. Its weekly drop is over 4%.

Counterpart Ethereum was also in the red and traded at $1,951.93 -- slipping by 1.9% over the day. Its weekly performance is broadly flat.

In the top 10 cryptocurrencies list, Elon Musk's favourite Dogecoin outperformed with an upside of over 4.4% to trade at $0.09134. Its weekly gains are around 8.5%.

Other cryptocurrencies like USD Coin, XRP, and Cardano traded between flat to marginally up. BNB was down 0.5% and Tether traded unchanged from the previous day.

Talking about the current performance, CoinDCX Research Team said, "Crypto market plunged over 3% in the past 24 hours with trading volume increasing by 27% to US$57 Bn. Bitcoin and Ethereum, both fell by 3% and 5% respectively after UK CPI for March came at 10.1% YoY, which is 0.3% more than the expectation signaling interest rate hike to continue in coming announcements."

The United Kingdom's CPI inflation came in at 10.1% in March 2023 --- and although this was lower compared to the previous month's print of 10.4% --- however was above the market's estimates of 9.8%. Also, UK's inflation stays above the 10% mark for seven consecutive months and is still above the Bank of England's target of 2% for about two years now.

Further, CoinDCX Research Team added, "Ethereum staking deposits outpaced withdrawals for the first time since the Shapella upgrade, with nearly 95,000 ETH deposited and just over 27,000 ETH withdrawn, creating a net positive flow of almost 68,000 ETH. The total amount of ether pending withdrawal remains just under $2 Bn in value at nearly 927,000 ETH, down approximately $1 billion from its post-Shanghai high of over $3 billion."

Meanwhile, it said, institutional investors have shown renewed interest in crypto investment products, with total inflows over the past week reaching $114 million, marking the fourth consecutive week of inflows and a total of $345 million.

In particular, CoinDCX pointed out that Bitcoin has captured investors' attention, with inflows of $104 million last week, bringing its total four-week run to $310 million.

Lastly, the research team said, "The growing interest in the flagship crypto may be a result of an ongoing flight to safety from investors fearful of the ongoing traditional finance challenges."


Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 20 Apr 2023, 03:20 PM IST
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