Crypto newsletter: Crypto markets bleed, Bitcoin below 33k

• Bitcoin hits 3-month low
• Number of BTC whales is decreasing
• Terra plunged  over 13.0%

Major cryptocurrencies came under heavy selling pressure on Monday, extending losses from last week amid broad risk aversion. Bitcoin plunged below $33,000 and reached its lowest level since January 2022 as investors moved towards US dollar as a tighter monetary policy, slowdown in the global economy amid lockdowns in China drained liquidity and took a toll on risky assets especially tech stocks and digital assets. Other cryptocurrencies also saw their valuations fall sharply, with Ethereum plunging more than 7% to below $2,370. Bitcoin's market dominance increased to 41.8%. The capitalization of all digital assets in circulation fell to 1.496 trillion, while an average daily trading volume is registered at $ 106 billion.

Bitcoin price has consistently moved in the same direction as the Nasdaq 100 index for over seven months. Therefore this week’s US CPI inflation reading will be closely watched by investors. Source: xStation5

Negative macro outlook puts pressure on market sentiment. The Crypto Fear & Greed Index fell to 11 and is now firmly back in “ extreme fear” territory. Source: Alternative me

• SEC approved Valkyrie’s futures exchange-traded fund (ETF) application. This represents another ETF that has been approved by the US regulator 
• MicroStrategy CFO, Phong Le stated that $21,500 per Bitcoin would be a level where MicroStrategy would have to add more collateral to prevent a margin call.
• Recent Glassnode data showed that the number of whales holding at least 1,000 coins is dwindling, while exchange inflows (CEX) of more than 1.7 million coins reached the highest level since February.

Rising CEX inflows may point out that large investors are seeing BTC and potentially prepare for a bear market. Source: Glassnode

• Another important on-chain metric Long-Term Holder (LTH) sentiment also  supports bearish scenario. The LTH Spent Price (pink) shows that the average purchase price of coins being spent by these investors is at break-even since it is meeting with the spot price. 

LTHs which bought BTC in 2021 and 2022 are currently selling their holdings at break-even on average. Source: Glassnode

• Yesterday's order book showed a high accumulation of buy orders around $33,000 level, which was breached on Monday.   

BTCUSD order book data  from Binance points to rising sellers activity. Source: Material Indicators

•  According to on-chain data from YCharts, there were 233,892 daily transactions worth about $30 billion on May 8, which has been about the average since January.

Number of BTC daily transactions still remain elevated despite negative sentiment. Source: YCharts.

Bitcoin price has breached a significant support level at $33,000, which is marked with previous price reactions and lower limit of the 1:1 structure. If current sentiment prevails, downward move may accelerate towards psychological support at $30,000.Source: xStation5

ETHEREUM price fell over 7.0% and broke below major support at $2485 which now acts as the first line of resistance. Next target for sellers can be found around 42170 where January 2022 lows are located. Source: xStation5

TERRA is the most significant loser from the larger-cap altcoins. Token's price tumbled 13% today and broke below major support at $62.25 which is marked with lower limit of the 1:1 structure and 50.0% Fibonacci retracement of the upward wave launched in May 2021. If sellers manage to uphold control, downward move may accelerate towards next support at $48.76. Source: xStation5