Updated just moments ago
Crypto Prices Decline as Tom Lee Sets Ether Purchase Limit
As interest rates surged on Wednesday, traders who had wagered on rising prices faced significant forced selling.
EU Debt Crisis Resurfaces
On Wednesday, the EU debt crisis reemerged as the yield on French 10-year OAT bonds jumped by 17.6 basis points, reaching 4.924%. In contrast, the German 10-year Bund yield saw a smaller increase of 3 basis points, settling at 3.51%.
This shift widened the OAT/Bund spread, known as “le spread,” to over 141 basis points, a level not witnessed since the 2011 crisis. The previous crisis primarily impacted the periphery countries of the Economic and Monetary Union (EMU)—Portugal, Italy, Greece, and Spain—while this time, the bond sell-off is affecting a central country of the monetary zone.
The euro dropped by 0.7% against the dollar on Wednesday, trading at its lowest in five months at $1.1183.
BitMine to Halt Ether Purchases at 5% Limit, Confirms Tom Lee
Tom Lee, Chairman of BitMine Immersion Technologies, announced during a keynote at Token2049 in Singapore that the company will cease buying ether once it has acquired 5% of the cryptocurrency's supply. "That’s a hard cap. We’re not gonna be accumulating past 5%,” Lee stated. He added that the firm still needs to purchase 100,000 ETH to reach this limit.
Since midnight UTC, ether's price has dropped by 4.5% to $2,477, while Bitcoin has seen a decrease of 2.2%.
Continuing Global Bond Sell-Off
The global bond sell-off persists, with U.S. Treasury yields rising across the board, affecting markets in Europe and the UK. The yield on U.S. 10-year bonds has reached 5.333%, and the 30-year yield has hit a new high of 5.715%. In the UK, the 30-year gilt yield has exceeded 6%, currently at 6.014%.
The strengthening dollar is contributing to this pressure, with the U.S. Dollar Index (DXY) climbing above 102.
Bitcoin has dropped more than 2% in the last 24 hours, falling below $84,000 and reaching a low of $83,300. Initially, oil prices surged due to reports of Iranian tanker attacks, but WTI crude has since reversed its gains, dipping below $90 per barrel.
U.S. equities are also experiencing a pullback after the Nasdaq 100 and S&P 500 reached all-time highs on Tuesday, with Invesco QQQ, which tracks the Nasdaq 100, declining by nearly 1% in premarket trading.
Bitcoin Falls Below $84,000, Liquidations Triggered
On Wednesday, Bitcoin decreased by as much as 2.4%, dropping to approximately $83,600 and slipping below the $84,000 mark as around $550 million in leveraged crypto positions were liquidated over 24 hours, according to CoinGlass data.
Liquidations occur when exchanges automatically close positions that traders cannot maintain due to losses, primarily impacting those who had bet on rising prices.
Ether fell nearly 4% to around $2,590, XRP decreased about 4%, and SOL dropped over 3%.
Dan Khus, chief analyst at LVRG Research, noted to Bloomberg that this decline appears to be "a leverage flush instead of a downward trend."
The drop in Bitcoin takes it below the $84,000 threshold that FxPro identified on Tuesday as a pivotal point for sellers. The recent low near $83,000 now serves as the next significant test.
Market risk appetite has diminished, further influenced by renewed Iranian attacks in the Strait of Hormuz, which have dampened expectations for the normalization of shipping in the area, pushing Brent crude prices above $101 per barrel. The 10-year Treasury yield has also climbed back over 5.3%, and Europe's Stoxx 600 index has ended a three-day winning streak. U.S. stock futures are relatively unchanged after the S&P 500 closed at a record high.
Minutes from the Federal Reserve's recent meeting are set to be released later on Wednesday. Rachael Lucas, an analyst at BTC Markets, suggested to Bloomberg that a hawkish interpretation could further elevate yields and the dollar, maintaining pressure on risk assets.