Bitcoin, Ethereum, Dogecoin Trade Mixed Amid Broader Macroeconomic Worries: Analyst Says Market Correction Hasn’t Slowed Down Whales

Major cryptocurrencies continued to trade mixed on Wednesday with prevailing weakness attributed to larger macroeconomic concerns.

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What Happened: Bitcoin experienced a 17.5% correction in the 12 days, leading to a collective $385 million liquidation in long (buy) futures BTC contracts.

On a broader economic scale, 2024 saw a reversal in the DXY index, which assesses the strength of the U.S. dollar against various foreign currencies, including the euro, the British pound, and the Japanese Yen. After reaching 100.80 on Dec. 28, 2023—its lowest point in over 5 months—the U.S. dollar gained traction, with the index currently hovering near 103.32. This movement indicates that investors maintain confidence in the U.S. currency, despite fiscal challenges, at least in comparison to other currencies.

According to the FedWatch Tool from CME Group, the probability of an interest rate reduction in March has decreased to 47% from 81% in the previous week. Moreover, investors are now expecting only 5 rate reductions throughout 2024, compared to the previous estimate of 6. New York Fed President John Williams and Atlanta Fed President Raphael Bostic have communicated that they do not feel the need to hastily decrease interest rates, even if there are no further hikes under discussion, as per CNBC.

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The global cryptocurrency market cap now stands at $1.56 trillion, showing a 0.48% increase in the past 24 hours.

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In Wednesday’s session, the S&P 500 and Nasdaq Composite concluded on a positive note. The Nasdaq achieved a 0.4% increase, buoyed by the rally of technology stocks such as Netflix. Conversely, the Dow Jones exhibited weaker performance, ending the session approximately 0.3% lower. Moving forward, traders will maintain their focus on earnings reports, particularly from Tesla, Las Vegas Sands, and IBM, all of which are due after the bell.

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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe suggests that Bitcoin is approaching a critical level of support at the $36-38K range, which he deems important as the range low.

“Meanwhile, sentiment is flipping towards a negative manner, as people are worried about the future perspectives. Good things. Buy the dip.”