Bitcoin recording lowest levels in two months

2 Mayıs 2024

Today’s market analysis on behalf of Samer Hasn Market Analyst and part of the Research
Team at XS.com

Today, Bitcoin is recording its lowest levels in more than two months, with a decline to
$56,500, which also prompted the entire cryptocurrency market to record sharp losses as
well.
These extended losses since yesterday led to the liquidation of about half a billion dollars
from long positions in Bitcoin futures during approximately the previous 36 hours, according
to CoinGlass. These severe losses and liquidations also weakened traders’ sentiment about
the future and pushed the premiums of many May and June futures contracts below zero
yesterday afternoon, according to Deribit.
These declines come amid weak sentiment in financial markets in general, as the S&P 500
index fell by 1.5%, with pessimism about the possibility of cutting interest rates this year.
According to current expectations, we may not see any rate cut before next September, and
this does not seem very likely either, given the acceleration of inflation, economic activity,
and the resilience of the labor market.
Today will see more labor market numbers, both ADP non-farm employment and job
openings (JOLTS), in addition to the reading of ISM manufacturing PMI.
We also conclude today with the Fed’s decision on the interest rate, which interest rate
derivatives traders expect will not change in the current rates, according to the CME
FedWatch Tool. However, the focus will be on the speech following the decision and talking
about monetary policy makers’ vision of the current inflation path and the likely path for the
rest of this year.
Crypto market is usually not affected by short-term movements in stock markets or surprises
in economic data, but a noticeable decline in risk appetite in general leads to sharp declines
simultaneously. So, crypto investors may give more focus to the monetary policy path.