Cryptocurrency market March 15 CHK: Bitcoin corrects below 25,000, US stocks stop the 5-day losing streak

After setting a local top at $26,386 with the CPI in the United States matching the experts’ forecasts, Bitcoin corrected sharply overnight, back below the $25,000 threshold.

Cryptocurrency Market

BTC hit a nine-month high above $26,500 following the release of the latest US inflation data, before retracement close to $24,000.

Supported by close-to-anticipated inflation data and the banking sector’s continued recovery from the disaster, Bitcoin bounced above $26,000 on Tuesday before losing most of its gains.

The largest cryptocurrency by market capitalization is currently trading close to the $25,000 mark, after a sharp correction towards $24,000 overnight.

Bitcoin bounced back after the Bureau of Labor Statistics released its February Consumer Price Index (CPI), which showed inflation falling to 6% from January’s 6.4%. Core inflation rate, type excluding food and energy costs, rose 0.5%, up slightly from January, slightly above the forecast of 0.4%. The annual inflation rate has decreased slightly from the previous month.

Given the recent correction, Riyad Carey, research analyst at data firm Kaiko, said: “This is a healthy correction after the euphoric rally.”

BTC spiked this week following decisions by US banking and financial regulators to protect depositors at Silicon Valley Bank (SIVB) and Signature (SBNY), while also reflecting hope investors that the US central bank will reverse its current hawkish inflation rule.

Altcoins continue to record gains despite BTC turning to correct after failing to break above $26,500.

Leading the way is AI-focused project SingularityNET (AGIX), which bounced more than 30% on the day, erasing all of its losses over the past week.

Following closely behind is Stacks (STX), an open-source blockchain consisting of decentralized applications (dApps) and smart contracts built on Bitcoin, with a rally of nearly 30%. On the 7-day timeframe, STX has recorded a growth of more than 50%. Threshold (T), ImmutableX (IMX), Conflux (CFX) are also tokens that bounced strongly on the day, climbing more than 20%. Other projects like Tezos (XTZ), Aptos (APT), Cosmos (ATOM), Mina (MINA), Render Token (RNDR), Fantom (FTM), Oasis Network (ROSE), Zilliqa (ZIL), dYdX (DYDX) ), Enjin Coin (ENJ), Filecoin (FIL)… showed a recovery of 7-11% in the last 24 hours.

After failing to break above $1,800, Ethereum (ETH) turned around for a sharp correction, establishing a local bottom around $1,650, before returning above $1,700 for the time being. The smart contract token is still trading in the green, with a gain of more than 2.5% on the day.

According to data from Ultrasound.money, on the morning of March 15, the Ethereum network reached the 3 million ETH mark burned from EIP-1559.

At the current market price of ETH of $1,710, the amount of Ether is worth more than $9.1 billion.

EIP-1559 is a special mechanism implemented by Ethereum in August 2021 that sets a common fee called base fee that applies to all transactions on Ethereum. As a result, EIP-1559 helps stabilize transaction fees and makes it easier for users to predict gas fee fluctuations, as well as have the option of paying a priority fee for validators to help transactions go through. show faster.

However, the most notable change of EIP-1559 is that it will burn the entire base fee to create deflationary pressure for Ethereum.

Tether, the largest stablecoin by market capitalization, has issued an additional 2 billion USDT on the Ethereum and TRON networks. This news has caught the attention of investors and traders alike, as it could have significant implications for the space.

According to transaction data provided by Whale Alert, Tether has issued 1 billion USDT on Ethereum. Similarly, another 1 billion USDT was issued on the TRON network.

Macro factors

The US stock market rallied in Tuesday’s trading session (March 14), helping to bring global stocks to an end the previous five-day losing streak, after the US inflation data was released at a low level. in line with forecasts, reinforcing the possibility of the Federal Reserve (Fed) raising interest rates with a short jump at its meeting next week. Meanwhile, concerns about demand sent crude oil prices down more than 4% to a three-month low.

This session witnessed a rebound in bond yields in both the US and Europe after a dizzying drop as bond prices soared in the previous session. Rising yields suggest a easing of risk aversion in financial markets.

A report from the US Department of Labor showed that the country’s consumer price index (CPI) increased by 0.4% in February, down from the 0.5% increase recorded in January. Within a year, February CPI rose 6%, down from 6.4% gain in the 1-year period to January.

Yields on US Treasuries rose slightly after the release of the data, reflecting expectations that the Fed will continue to raise interest rates at its meeting next week but with a small 0.25 percentage point jump instead of a . big jump 0.5 percentage points.

“The numbers in the report from the CPI report are in line with expectations and do not indicate that the Fed has no choice but to raise rates. The Fed still has different options, and that’s a good thing,” said fund manager Jamie Cox of Harris Financial Group.

At the close, the Dow Jones gained 336.26 points, or 1.06%, to close at 32,155.4 points. The S&P 500 index rose 1.68% to 3,920.56 points. The Nasdaq index rose 2.14% to 11,428.15 points.

All 11 major industry stocks in the S&P 500 closed in a bullish state. Banking group rebounded, recovering some of the losses after the sell-off sessions due to the collapse of Silicon Valley Bank (SVB) and Signature Bank.

The Stoxx 600 index of European stocks rose 1.53%, marking its biggest gain since December and the first gain in four sessions. European bank shares rose 2.5%, a day after experiencing their steepest sell-off in more than a year.

The MSCI All-World Index of world stocks reversed its downtrend at the beginning of the session and closed with a gain of 0.84%, marking the first gain in 6 sessions.

Just a week ago, investors realized a “hard reality” that interest rates in the world could increase much and stay high for a longer time than expected. “But now, the possibility of the Fed raising interest rates by 0.5 percentage points is almost gone. The market is too fragile,” said Mr. Cox.

In less than a week, 3 US banks “failed”. The collapse of SVB, a bank that specializes in serving the tech world, sent investors into panic and rushed to buy safe assets like bonds and gold.

On Tuesday, the credit rating agency Moody’s cut the credit outlook of the US banking system to “negative” from “stable” previously – a move that signals the possibility of a credit score cut.

In just a few days, global bank stocks lost hundreds of billions of dollars in value, while the government bond market had one of its biggest rallies in decades.

Near the end of the session, the 2-year US Treasury bond yield increased by 19.5 basis points, reaching 4.225%; 10-year yield increased 0.12 basis points to 3.637%. Yields on two-year German government bonds rose to 2.883% after falling 73 basis points in the previous session.

As of Monday, the European Central Bank (ECB)’s expected peak interest rate fell to 3.4% from 4.1% last Thursday. The market believes that central banks will have to shift to a softer monetary policy stance when assessing financial risks.

“We saw a ‘cool off’ rally today for two reasons. Firstly, the banking system has partially stabilized and the CPI report is not surprising. But I don’t think we’re completely out of trouble yet,” Nuveen chief investment officer Saira Malik told CNBC. Ms. Malik said that the collapse of SVB could lead to tightening of supervision regulations and trigger a tightening credit cycle, which is very likely to lead to an economic downturn.

Oil prices fell sharply this session on concerns that financial fluctuations could lead to a slowdown in economic growth, adversely affecting energy demand.

Brent crude oil futures in London fell 4.1% to settle at $77.45 per barrel. WTI oil futures in New York fell 4.6% to $71.33 a barrel.

This is the lowest closing price for both oils since December 9 and the biggest percentage drop since early January. Also, technically, both oil prices fell in. oversold position for the first time in weeks.