A wave of selling took command of the cryptocurrency market on Wednesday after Bitcoin’s (BTC) price dropped below $56,000.
The market-wide sell-off led to $1.4 billion in liquidations, and some analysts suggested that this could be the final sweep out of overleveraged long traders before Bitcoin can make a run higher to the $70,000 level.
One sign that the market had moved ahead of itself over the past week was the rapidly rising Kimchi premium, which was followed by a 7% decline in BTC’s price on Wednesday as traders worried that it might be the signal for a market top.
Despite the market downturn, analysis of on-chain data suggests that Bitcoin could soon see a rally to a new all-time high as whales, miners and long-term holders have decreased or stopped selling altogether and institutional demand remains high.
Traditional markets near record highs
Equities markets traded near their all-time highs on Tuesday as accelerating job growth, record levels of service sector activity and an expansion in manufacturing resulted in unexpected optimism that pushed stock prices higher.
Despite this positive news, the Dow and Nasdaq closed down 0.06% and 0.16%, respectively, while the S&P 500 managed to end the day with a 0.06% gain.
Coinbase listing provides a little relief
A few altcoins did manage to rally throughout the day after Coinbase revealed that it would list 1Inch, Enjin (ENJ), New Kind of Network (NKN) and Origin Protocol (OGN) on Coinbase Pro.
Starting today, inbound transfers for 1INCH, ENJ, NKN & OGN are available in the regions where trading is supported. Traders cannot place orders and no orders will be filled. Trading will begin on or after 9AM PT on Fri 4/9 if liquidity conditions are met. https://t.co/L5KlZvMiuA— Coinbase Pro (@CoinbasePro) April 7, 2021
Following the announcement, the price of 1Inch and ENJ saw modest gains of 5%, while Origin Protocol saw a 10% increase, and NKN rallied 27%.
Solana (SOL) also rallied 10% and Ether (ETH) declined 7% to trade below $2,000.
The overall cryptocurrency market cap now stands at $1.90 trillion, and Bitcoin’s dominance rate is 55.6%.
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