Crypto Market Declines Amidst Stock Market Fall

In recent days, the crypto market has witnessed a significant downturn, with its total capitalisation dropping to $2.5 trillion. This decline follows a notable fall in the US stock market, and the current values are below what was seen during the peaks of early 2024 and late 2021.

Historically, when faced with a similar downturn, a recovery often took place as buyers stepped in. However, the current market conditions suggest that the likelihood of such a rebound is less than in previous years. This shift is largely attributed to the increased influence of traditional financial institutions, which have created a stronger connection between stock market movements and the cryptocurrency sector.

Interestingly, the fear in the crypto market appears to be less severe at this moment. The Fear and Greed Index currently sits at 24, having gained 4 points from the previous day. Just a week ago, this index reached a low of 10, indicating a notable change in market sentiment.

Bitcoin saw a dip towards $76,500 early Tuesday but has since rallied to over $80,000, aligning itself with levels seen during Monday's trading. Nevertheless, bearish patterns still dominate the daily charts, hinting at a potential sell-off after the coin’s failure to maintain above the 200-day moving average. Many analysts believe that a pullback to the $70,000 to $74,000 range seems probable, especially after the recent consolidation and rebound in early March diminished any short-term oversold conditions.

Ethereum, on the other hand, has been struggling to find its footing. After dropping to approximately $1,750 at the start of Tuesday, these values mark the lowest seen in 17 months. On weekly charts, the RSI oscillator indicates a similar decline to its lowest point since the mid-2022 bear market phase. This situation raises questions: Is this a moment for the bold to invest, or is it a signal for a more pronounced breakdown in this leading altcoin? The next few days are expected to shed light on this uncertainty.

Market News Overview

A recent report from CoinShares indicates that global investments in crypto funds saw a decline of $876 million last week. This comes on the heels of a record outflow amounting to $2.911 billion the week before. Specifically, Bitcoin investments dropped by $756 million, while Ethereum saw a decrease of $89 million. Conversely, investments in Solana increased by $16 million, XRP by $6 million, and Sui by $3 million.

Moreover, the latest adjustments in Bitcoin mining difficulty indicate a 1.43% increase, bringing it to 112.15 trillion hashes. This adjustment does not offset the 3.15% drop seen two weeks prior but does approach the all-time high recorded in January at 114.17 trillion hashes.

Additionally, the company Strategy, formerly known as MicroStrategy, plans to raise $21 billion by selling preferred shares as part of its At-The-Market program. The funds are earmarked for purchasing more Bitcoin and supporting other corporate initiatives.

Crypto, Market, Stocks