The cryptocurrency market faced another day of downward pressure as turmoil in traditional markets continued to spread after the recent 10-year interest rate hike on U.S. government bonds.
Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin (BTC) fell to $ 44,710 late in the evening of February 25 before repurchasing key support to help digital assets recover above $ 46,500, but analysts are looking for $ 50,000 overall. Become a firm support before waiting for the uptrend to continue.
Despite BTC’s major acquisitions from MicroStrategy, Tesla and MassMutual, most institutional investors remain wary of the security and tax regime preventing them from investing in Bitcoin, according to Damien Vanderwelt, co-chair of Galaxy Digital.
Institutional investment has been an important source of optimism in the cryptocurrency sector by 2021, but its impact on helping BTC reach $ 1 trillion in market value can be overestimated because recent analysis indicates that stable whales and retailers still have the highest purchasing power. capacity.
Rising interest rates are putting pressure on GBTC
On February 25, the interest rates on the 10-year US Treasury rose to 1.52%, the highest in a year.
According to Chad Stinglas, Commercial Director of CrossTower, the move caused pressure in the market, and as a result, “GBTC premium fell to minus 6% and closed the day at around 2%”. The analyst sees interest rate volatility as an important source of market volatility as the long end of the curve increases and the US dollar falls.
Cryptocurrencies came under increasing pressure as stock markets deteriorated throughout the day, possibly due to “liquidity struggles” as traders opposed margin calls and had to issue cash.
“I interpret the collapse in GBTC premiums as a sign that retail is dumping free cash, or that large fund owners like ARKW are seeing an influx of funds, forcing them to sell GBTC with everything else.”
Traditional markets are still volatile
The yield on 10-year government bonds fell 0.0582 basis points to 1.46 on February 26, down 3.82% from a previous high. This led to turbulent days in the markets when the major indices were nearly mixed.
The Nasdaq closed the day at 0.56% and recovered some of its losses after falling 3.5% on February 25th. Meanwhile, the S&P 500 and DOW indices finished the day in the red, 0.48% and 1.51%, respectively.
Most of the major cryptocurrencies also suffered big losses on Friday, with the exception of Cardano (ADA), which became the third largest cryptocurrency by market cap after the price reached a new permanent high of $ 1.29. The current tension over altcoins appears to be linked to the upcoming launch of Mary’s mainline network, scheduled for March 1st.
The primary Attention Token (BAT) also resisted the market selling, rising 6.43% after the February 23 announcement of the upcoming Decentralized Brave Exchange (DEX).
Ether (ETH) is down 7.19% and is trading below $ 1,500, while Binance Currency (BNB) is down 8.36% to $ 224.14.
The total cryptocurrency market cap is now $ 1.533 trillion, and Bitcoin’s dominance is 61.3%.