Ethereum

2024

<h4><strong>While the first week of March may not bring forth any specific crypto catalysts, a few are beginning to draw attention. </strong></h4> 
<p>Firstly, many anticipate the pending spot <a href="https://www.altcoinbuzz.io/?s=ETHEREUM+ETF" target="_blank" rel="noopener">Ethereum ETF</a> applications will receive approval in May at the SEC’s final decision date, although institutions have been <a href="https://www.theblock.co/post/278508/coinbase-urges-sec-to-approve-listing-of-grayscales-proposed-spot-ether-etf" target="_blank" rel="noopener">lobbying</a> for an earlier green light.</p> 
<h5><strong>Getting Ready for a Market Adjustment in March 2024</strong></h5> 
<p>There may be a potential market correction in the current climate. Historical data indicates a pattern of price downturns preceding halving.</p> 
<ul> 
 <li>The looming question revolves around the potential impact of spot Bitcoin ETFs on the crypto market this week.</li> 
 <li>Despite steady inflows into these ETFs, there has been a notable presence of <a href="https://decrypt.co/217803/genesis-approved-sell-1-6b-grayscale-bitcoin-shares" target="_blank" rel="noopener">sell pressure</a> from entities like Genesis and Celsius.</li> 
 <li>Consequently, while one might logically expect BTC’s price to continue ascending, this assumption hinges on the absence of significant sell-offs.</li> 
</ul> 
<p>Additionally, market dynamics could be influenced by the revision of Q4 GDP data on Wednesday and potential surprises in the <a href="https://www.bea.gov/data/personal-consumption-expenditures-price-index" target="_blank" rel="noopener">PCE</a>, the Fed’s favored inflation metric, on Thursday, which could trigger rallies.</p> 
<ul> 
 <li>Moreover, the market will remain on edge, with numerous statements expected from Fed members throughout the week.</li> 
 <li>Historical volatility suggests potential market turbulence as the Q1 options expiry approaches on Thursday, March 28th.</li> 
</ul> 
<p>There are also macroeconomic concerns emerging, notably Israel’s <a href="https://www.independent.co.uk/news/world/middle-east/israel-palestine-gaza-rafah-ground-offensive-hostages-b2498356.html" target="_blank" rel="noopener">announcement</a> of escalated operations in Gaza by March 10th, which may lead to supply chain disruptions around the Red Sea and subsequent inflationary pressures in Europe and beyond.</p> 
<ul> 
 <li>Similarly, reports of Russia’s advances in Ukraine have prompted the US and its allies to impose additional sanctions, potentially disrupting global supply chains and geopolitics.</li> 
 <li>Notably, the EU’s <a href="https://asia.nikkei.com/Politics/Ukraine-war/EU-agrees-on-first-sanctions-on-Chinese-Indian-companies-for-Russia-war-links" target="_blank" rel="noopener">sanctioning</a> of Chinese and Indian companies for their dealings with Russia may strain relations with these countries.</li> 
</ul> 
<p>Despite these challenges, crypto may have a silver lining, as it stands to benefit from such disruptions, given its borderless nature. However, concerns arise regarding the decentralization of certain cryptocurrencies, highlighted by the <a href="https://www.euronews.com/business/2023/11/27/which-crypto-blockchain-is-preferred-by-terrorist-organisations" target="_blank" rel="noopener">pressure</a> on Circle to cease issuing USDC on Tron.</p> 
<h5><strong>Our opinion:</strong></h5> 
<p>We should prepare for a potential correction in the current market climate. Historical data indicates a pattern of price downturns preceding Bitcoin halving events. Analyzing BTC/USD price movements from 2009 to February 16, 2024, reveals several instances where Bitcoin’s value declined in the three months leading up to each halving event.</p> 
<p>For example, the halving on May 11, 2020, followed a notable price drop, primarily driven by the ‘<a href="https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-its-value-in-two-day-plunge.html" target="_blank" rel="noopener">Black Thursday</a>‘ market crash on March 11, 2020. While there remains the possibility of another pre-halving price decline, it’s important to note that the value could also rise post-halving due to the reduction in block rewards.</p> 
<p>As speculation intertwines with historical trends, it’s essential to anticipate nuanced shifts in value. Additionally, it’s worth noting that meme coins are currently outperforming BTC, which could be a cause for concern. Therefore, it may be prudent to allocate some funds for investment in case of a price dip.</p> 
<h5><strong>Leverage Washout on Horizon</strong></h5> 
<h6 style="text-align: center;"><a href="https://lh7-us.googleusercontent.com/mu-YU8Y_vDiZ7hlnGflLyBzHGBReEogbS_r-sIDZvVhcB1vJrGGq7bCvxU8S_9UAYD8x3OGMQiXU6uMVgewTht4Pmzi2ULEKVJT7DpQtz0CA3TS05w13GPJyxCskm4y7pQPGZV0i4ZwNXe0_q_yTRK8"><img decoding="async" src="https://lh7-us.googleusercontent.com/mu-YU8Y_vDiZ7hlnGflLyBzHGBReEogbS_r-sIDZvVhcB1vJrGGq7bCvxU8S_9UAYD8x3OGMQiXU6uMVgewTht4Pmzi2ULEKVJT7DpQtz0CA3TS05w13GPJyxCskm4y7pQPGZV0i4ZwNXe0_q_yTRK8"></a><strong>Source: <a href="https://www.coinglass.com/" target="_blank" rel="noopener">Coinglass</a></strong></h6> 
<p>According to crypto data aggregator <a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noopener">Coinglass</a>, traders on platforms like Binance, Bybit, OKX, and Huobi have experienced $379.81 million in liquidations in recent hours, mostly stemming from those attempting to short BTC.</p> 
<ul> 
 <li>The largest single liquidation order occurred on Binance, involving ETHUSDT, valued at $10.38 million.</li> 
 <li>Meanwhile, data from crypto structuring and trading solutions firm STS Digital reveals that the ratio between the implied yield basis, representing the annualized spread between prices for one-month futures and prices in spot markets, and options-induced one-month implied volatility has more than doubled to around 0.34 this year.</li> 
 <li>A significant implied yield basis relative to underlying volatility often indicates heightened levels of leverage and speculation.</li> 
</ul> 
<p>Excessive bullish speculation can lead to leverage washout, where leverage positions are forcibly closed due to margin shortages. These so-called long liquidations can contribute to a sharp decline in prices.</p> 
<h5><strong>The Sentiment Back To Greed</strong></h5> 
<p><img decoding="async" class="aligncenter" src="https://lh7-us.googleusercontent.com/EdBbF2lYH-wAA-EkqZIEiqezfDy7s0hGcpJND9D2WlP0QxvoupRpCsz0Q3Esdy2TqtsMXFcMrP_m-ZoWO1FTTLc1yq3k-TsC_76oVpaVdmhgeTQ_bbJDJKuLSwQsZnqVujogQs4EnPKgJRDgukSMy1c" width="505" height="454"></p> 
<p>Following recent developments, the sentiment in the crypto market remains greedy, as indicated by the <a href="https://alternative.me/crypto/fear-and-greed-index/" target="_blank" rel="noopener">Crypto Fear &amp; Greed Index</a>. According to the index, the average crypto investor’s prevailing sentiment is “greed.”</p> 
<ul> 
 <li>BTC’s fear and greed index has reached 72, marking a substantial increase of 20 points since the beginning of the year.</li> 
</ul> 
<p>This index is a gauge for identifying pronounced bearishness at market bottoms and “irrational exuberance” at market peaks. It has demonstrated high sensitivity to BTC price movements within the current range.</p> 
<ul> 
 <li>Even minor fluctuations in BTC/USD can trigger significant shifts in sentiment, potentially leading to a rapid transition towards “extreme greed.”</li> 
 <li>Such shifts may signal that the market’s upside momentum could be short-lived.</li> 
</ul> 
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<p>The post <a href="https://www.altcoinbuzz.io/cryptocurrency-news/preparing-for-market-correction-in-march-2024/">Preparing for Market Correction in March 2024</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.</p>

Preparing for Market Correction in March 2024

Altcoin Buzz

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