Good morning, crypto enthusiasts. Today, we discuss the market overview, focusing on the recent activities in the space that have left investors with mixed feelings.
Bitcoin settled above $27.1K following hawkish comments by Cleveland’s Federal Reserve Bank president and dispiriting Chinese manufacturing data. As a result, Bitcoin whales reduced their holdings and sent assets to exchanges before House members approved a bill to raise the debt ceiling. This led to a 2.2% drop in the Bitcoin price over the past 24 hours. Despite encountering selling pressure, Bitcoin managed to hold above $27.1K, supported by long-term buyers.
While some attribute the current bearish sentiment in the crypto market to rising interest rates and disappointing manufacturing data from China, others point to uncertainty surrounding the U.S. government’s ability to extend the debt limit and meet its financial obligations. House lawmakers finally passed the bill late Wednesday via a bipartisan effort, overcoming strong opposition from far-right Republicans. Nevertheless, cryptocurrencies and other risk assets seem to have been significantly disrupted.
Moreover, the Chinese economy’s anticipated rebound slowed temporarily, as the official manufacturing purchasing managers index declined to 48.8 in May from 49.2 in April. This has added to the pressure on crypto assets, including Ether, which recently traded at around $1,875, off 1.4% from Tuesday.
Interestingly, stocks and cryptos have fallen together instead of diverging as they have over the past couple of months. According to Strahinja Savic, head of data and analytics at crypto-focused FRNT Financial, the technical range for Bitcoin is set between a downside range of $25K to $26K, with a breakout occurring decisively above $31K. What happens next remains to be seen.
On-chain data also shows that large Bitcoin holders reduced their holdings as uncertainty grew around the debt deal, and smaller whales unloaded risk by sending Bitcoin to exchanges. The supply of Bitcoin held by addresses with balances exceeding 100K BTC declined ahead of the debt deal, signaling a possible whale risk reduction strategy.
The key question is whether this reduction was tied to short-term fiscal concerns or longer-term questions about Bitcoin prices. An increase in Bitcoin supply for large holders following the debt deal could signal a renewal of bullish sentiment, while a continued decline would imply larger concerns.
As always, monitoring the market and keeping an eye on the actions of the whales could be indicative of the overall sentiment in the crypto space. Stay tuned for more insights into the ever-evolving world of cryptocurrencies.
Source: Coindesk
