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In a rapid and dramatic reversal, cryptographic markets have lost hundreds of billions of dollars in one day, which raises questions about the sustainability of recent gains stimulated by the surprise announcement of a new American cryptography reserve. At the top of the initial rally – completed after the Declaration of the Sunday of former president Donald Trump revealing the reserve – the market capitalization of total cryptography went from around 2.7 billions to 3.1 billions of dollars. But, from the latest readings, these gains were not only evaporated; The market now amounts to around 2.6 billions of dollars, even lower than before the announcement.
Why is the crypto broken down today?
“The real driver here is the global movement towards the risk trade,” writes the letter from Kobeissi (@kobeissiletter) via X. According to this analysis, increased trade tensions and a large uncertainty of economic policy have caused “all risky assets” to retrace strongly, including stocks, petroleum and crypto. On the other hand, traditional shelters such as gold have continued to display gains, strengthening the perception that cryptocurrencies are far from being a refuge at the turbulent time.
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This sudden slowdown was accompanied by astounding figures. “In the past 24 hours, the crypto has erased – $ 500 billion in market capitalization in a massive reversal,” notes Kobeissi’s letter. Bitcoin, which initially appeared in terms of a major rally, dropped at around 3% below its pre-announcement levels, losing nearly $ 250 billion in market value in just 12 hours.
Ethereum (ETH) has seen an even clearer retirement. Before the US Crypto Reserve News on Sunday, ETH hit a local hollow of $ 2,173 on March 2. Shortly after the announcement, it went to $ 2,550 before diving at $ 2,002, or 8% lower than its bottom before cancellation. “It came with a huge swing in the feeling of what seems to have been a colossal retail trap,” adds Kobeissi’s letter, noting that the index for fear of crypto and greed has gone from around 20 (extreme fear) to almost 55 (near greed) before bringing back to the 1920s.
Adding to these signals, the last week of February recorded a record of $ 2.6 billion in cryptographic funds – an alarming statistics that exceeded the previous summit of $ 500 million. Observers suggest that, despite the “most optimistic announcements of all time”, capital is running cryptocurrencies mainly due to the intensification of macroeconomic winds.
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Meanwhile, the SAFE HAVEN active ingredients continue to outperform. “Our premium members bought gold for months,” said Kobeissi’s letter, referring to a strategy that saw gold purchases during the fall in January. Since the start of the year, Gold has climbed around 10%, analysts still providing up. “We bought the dive in January and asked for $ 2,850 +. Friday, we called for another lower at $ 2,850 and the gold is approaching $ 2900 and more now, “said the market comment.
When crypto was once considered an emerging coverage against economic uncertainty, the current market behavior suggests that it is now grouped with other “risky assets”, motivated at least as much by changes in global feeling and macroeconomic pressures as by sectoral developments.
At the time of the press, Bitcoin exchanged $ 83,594.
Shutterstock star image, tradingView.com graphic
