Market update: bitcoin hits new all-time high before dramatic sell-off
Explore the volatile journey of bitcoin as it reaches a new all-time high, only to experience a sharp decline, affecting the broader crypto market and related stocks.
Bitcoin reaches new all-time high before facing a sharp decline
Bitcoin reached a new all-time high in the mid-afternoon before experiencing a sharp downturn as sellers dominated the market. The new all-time high (ATH) triggered a surge of selling, notably from recent leveraged long positions, contributing to the downward momentum.
Currently, bitcoin is trading within the range of yesterday, but a decline below yesterday's low of $62.3k could potentially lead to further market sell-offs. On a brighter note, the demand from Bitcoin ETF providers continues to support BTC, with the current bullish pennant pattern indicating the possibility of higher prices in the future.
Bitcoin daily chart
Ethereum's resilience and the pending SEC decisions
Ethereum, although also retreating from its high today, has outperformed bitcoin by approximately 6%. Bitcoin's rally since mid-January has been fuelled by spot ETF purchases, while several spot Ethereum ETFs are pending a decision from the SEC.
The SEC has recently deferred decisions on Ethereum ETFs proposed by BlackRock and Fidelity, with the market now anticipating the SEC’s ruling on the VanEck Ethereum ETF, due by 23 May. Should the VanEck ETH ETF receive approval, it is expected that the SEC will also greenlight the remaining ETF applications to avoid granting a 'first mover' advantage, mirroring the approach taken with Bitcoin ETFs.
Ethereum/bitcoin daily spread chart
Crypto-related stocks experience sell-off
The downturn was not limited to cryptocurrencies alone, with crypto-related stocks witnessing losses to various extents. Coinbase, after reaching a multi-month high yesterday, has seen a reduction of approximately 2.5% so far today.
MicroStrategy has experienced a decline of over 11% from another multi-month high. It is worth noting that, despite this drop, MicroStrategy's value has risen nearly 75% since the beginning of the year.
Meanwhile, bitcoin mining company Marathon Digital Holdings has seen a 10% decrease in today's session, leaving its year-to-date performance relatively unchanged.
Coinbase (COIN) daily chart
Microstrategy (MSTR) daily chart
Marathon digital holdings (MARA) daily chart
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This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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