Daily Crypto Signals: Bitcoin and Ethereum Lead Crypto Funds Amid Shifting Political Tides
Cryptocurrency markets experienced significant volatility as Bitcoin dropped below $111,500 and Ethereum corrected 9.2%, while US Democrat
Quick overview
- Bitcoin fell below $111,500, leading to significant liquidations of leveraged long positions worth around $280 million.
- Ethereum experienced a 9.2% drop, resulting in over $500 million in forced liquidations, but the overall market structure remained stable.
- US Democrats expressed willingness to collaborate with Republicans on digital asset legislation, indicating potential bipartisan support for crypto regulation.
- Despite price fluctuations, cryptocurrency exchange-traded products saw $1.9 billion in inflows, reflecting strong institutional demand.
Cryptocurrency markets experienced significant volatility as Bitcoin BTC/USD dropped below $111,500 and Ethereum ETH/USD corrected 9.2%, while US Democrats signaled bipartisan support for digital asset legislation and crypto funds recorded $1.9 billion in weekly inflows despite the price movements.
Crypto Market Developments
This week, the cryptocurrency market showed both institutional strength and price fluctuations. Regulatory changes and trade activity sent mixed signals. Democrats in the US made news by saying they were open to working with Republicans on comprehensive digital asset market structure legislation. This could be a sign of a shift toward bipartisan crypto regulation. The Democratic senators’ statement listed seven important foundations for future laws. These included safeguarding against illegal financing and filling in regulatory gaps in the spot market for digital assets that are not considered securities.
Cryptocurrency exchange-traded products, on the other hand, continued to do well, bringing in $1.9 billion for the second week in a row. According to CoinShares data, this pushed the total amount of assets under management in worldwide crypto ETPs to a record high of $40.4 billion so far this year. Even when the Federal Reserve changed interest rates and the market was generally uneasy, there was still strong demand from institutions. This suggests that people have faith in the fundamentals of digital assets.
There was also controversy surrounding Crypto.com last week, as the exchange was accused of hiding a user data breach from regulators in 2023. CEO Kris Marszalek and other company officials strongly refuted these assertions, saying that they had properly reported the event to the appropriate regulators and that no client cash were lost during the limited security incident.
Bitcoin Faces Liquidations, More Bearish Moves Ahead?
Bitcoin fell below the important $111,500 support level during Asian trading hours on Monday, which put a lot of pressure on it to go down. This drop caused around $280 million in leveraged long bets to be liquidated, mostly on the Bybit exchange, where about 80% of the liquidations happened. The selloff put Bitcoin’s daily demand zone between $110,700 and $113,200 to the test. If daily candles close below $113,200, the cryptocurrency could lose support from its 50-day exponential moving average.
Even if the price went down, on-chain statistics showed that institutional buying pressure stayed high. The Coinbase Premium Index stayed firmly positive during the drop. This showed that strong US spot demand was keeping prices from falling, which was backed up by Bitcoin researcher Axel Adler Jr.’s conclusions that demand had reached 95,800 BTC in the past month. The liquidations may have wiped out too many speculative positions, which might make it easier for prices to keep going up if spot demand stays strong.
Ethereum Saw a Near 10% Dip on Monday
Ethereum dropped 9.2% in less than 12 hours, going down to almost $4,150 before regaining support from buyers. The drop caused more than $500 million in forced liquidations from bullish leverage positions, but the selloff was more in line with the overall altcoin market than with Ethereum-specific worries. The open interest in futures was very steady at 14.2 million ETH. This means that the liquidations were balanced by fresh position entries and didn’t change the market’s structure in a big way.
The derivatives data gave a mixed picture of Ethereum’s short-term outlook. The monthly futures premium dropped to its lowest level in three months, while the perpetual funding rates temporarily went negative before rising back to -1%. But the options data didn’t show any advance planning for the drop, and the put-to-call ratios stayed close to usual levels of about 80%. This shows that panic selling caused the drop rather than coordinated bearish posture. This supports the case for recovery because institutional demand for spot Ethereum ETFs and corporate reserves in the ecosystem are both expanding.
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