SUPERNEWS

Crypto

$400M in Crypto Bets Wiped Out as Dollar Strengthens

Bitcoin and major cryptocurrencies face steep losses, with over $400M in bullish bet liquidations amid a stronger dollar.

By Jack Wilson

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4/2, 03:40 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • Major cryptocurrencies, including Bitcoin and Ether, faced a significant downturn, with over $400M in bullish bets liquidated amid a stronger dollar.
  • Solana and Dogecoin led the slide among major tokens, with losses up to 8%, highlighting market volatility and investor caution.
  • Analysts predict Bitcoin to be range-bound in the coming weeks due to strategic profit-taking among long-term holders and resistance at the $71K level.

Bitcoin Faces Downward Pressure

Bitcoin (BTC) and other major cryptocurrencies experienced significant losses, with BTC reversing last week's gains amid a stronger dollar. The leading cryptocurrency fell 5%, while Ether (ETH), Cardano’s ADA, and BNB Chain’s BNB showed similar declines. Solana’s SOL dropped 7%, briefly touching $200 before falling to $185, and Dogecoin (DOGE) saw an over 8% decrease. Bitcoin Cash (BCH) fell 10% amid profit-taking following a 40% rally, ahead of its expected halving event on April 4. The CoinDesk 20 index, tracking major tokens minus stablecoins, slumped just over 5%.

Liquidations and Market Sentiment

The market witnessed over $400 million in liquidations of bullish bets, with long positions taking the brunt of the losses. In contrast, short positions saw relatively smaller liquidations amounting to $85 million. Analysts from Bitfinex noted that some long-term investors have begun selling off their holdings, expecting bitcoin to consolidate within a range in the coming weeks. They highlighted strategic profit-taking among Long-Term Holders (LTHs), indicating a cautious market sentiment.

External Economic Factors

The U.S. dollar's strength, reaching a nearly 5-month high, exerted additional pressure on bitcoin and other dollar-denominated assets. Upbeat U.S. factory data contributed to this trend, with the dollar index (DXY) surpassing the 105 mark. This financial tightening worldwide diminishes investors' willingness to take risks. The Institute for Supply Management’s (ISM) manufacturing purchasing manager’s index (PMI) showed unexpected growth, further weakening the case for Federal Reserve rate cuts and impacting market expectations.

Street Views

  • Analysts at Bitfinex (Neutral on Bitcoin):

    "We believe that bitcoin is likely to continue to consolidate within a range, as previously dormant supply, particularly among Long-Term Holders (LTHs), is being sold (although at a relatively smaller scale than previous bull market tops)."

  • Alex Kuptsikevich, FxPro (Neutral on Bitcoin):

    "Bitcoin's fourth attempt to consolidate above $71K this week was unsuccessful... Bitcoin has thus found strong resistance, and the $69.5K and $68.5K levels attract our increased attention."