The crypto market fell sharply for hours in Asia on May 31, relinquishing previous gains. The global crypto market cap fell 1.37% to 1.14 trillion, with the price of the major cryptocurrencies Bitcoin and Ethereum falling 2% each.
Investors are liquidating their positions as expected as BTC price ended the month 8% lower for the first time this year. Bitcoin price rose 85% this year, but the rally started to fade in mid-April and even dropped below the key 200 WMA level.
Ethereum, despite being strong, remains under pressure as Bitcoin has been stuck in a range for weeks and the debt ceiling deal. Whales and institutional investors are bullish on Bitcoin and Ethereum, but a near-term decline is expected as the debt ceiling deal will prompt the US Treasury Department to issue T-bill that will withdraw US dollar liquidity.
Also Read: Binance Expands Support for Cardano (ADA) and Litecoin (LTC)
This is why the price of Bitcoin and Ethereum is falling sharply
Bitcoin’s price is currently trading below a key resistance zone after a short squeeze temporarily lifted prices during a long weekend of low liquidity with near-equal lows below it. BTC Open interest has dropped to 8.5 billion as some longs are liquidated to close the CME gap. However, BTC prices can still rise.
Bitcoin price in a 4 hour time frame. Source: CredibleCrypto
More than $80 million in crypto liquidation was recorded in the past 24 hours, with $25 million and $14 million in BTC and ETH, respectively. Liquidation is still low compared to before, but macro factors such as factory data in Japan and China are lower.
The aggressive tone of the Bank of Japan’s lenient central bank led to a decline in the crypto market in Asian hours. Bank of Japan Governor Kazuo Ueda warned of tightening on May 31 as high inflation weighs on the country. The global stock market fell and the European and US markets were expected to open lower.
Bitcoin total liquidation. Source: CoinGlass
BTC price is at an inflection point. If Bitcoin tumbles to 200-WMA, Ethereum will drop below $1800 and other altcoins will follow. BTC price is currently trading near USD 27000 and ETH price is trading at USD 1850. The action in the crypto market during US hours may confirm the sentiment in the market.
Also Read: Bitcoin (BTC) Reaches $30,000 as First Signs of Institutional Buying Appear
Varinder has 10 years of experience in the Fintech sector, with more than 5 years dedicated to blockchain, crypto and Web3 developments. A technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in more than 5,000 news stories, articles and newspapers. With CoinGape Media, Varinder believes in the enormous potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
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