Leading cryptocurrencies took a breather on Wednesday, while stocks closed at new records as investors weighed the report of a potential U.S.-Iran deal to end the war.
Crypto Market Cools Down
Bitcoin consolidated in the range between $80,800 and $82,800, while Ethereum retreated to the $2,300 region after pushing past $2,400 the day before.
Over $500 million was liquidated in the past 24 hours, with the majority of that in short positions, according to Coinglass data.
Notably, open interest in Bitcoin futures fell by nearly 4% over the last 24 hours. A falling open interest with a sideways price action typically indicates the market is consolidating or preparing for a trend reversal.
Moreover, Bitcoin’s Long/Short Ratio on Binance stood below 1, indicating most traders were betting on a price decline.
Market sentiment shifted from “Fear” to “Neutral,” according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $2.69 trillion, following an increase of 0.59% over the last 24 hours.
Stocks Rally, Oil Plummets
Stocks surged to new records on Wednesday. The Dow Jones Industrial Average gained 612.34 points, or 1.24%, to close at 49,910.59. The S&P 500 rallied 1.46% to close at 7,365.12, while the tech-focused Nasdaq Composite rose 2.02% to end at 25,838.94, both setting new records.
The rally followed the U.S. reportedly nearing an agreement with Iran, which aims to terminate the ongoing war and lay the foundation for extensive nuclear negotiations.
Oil prices tumbled as a result, with the United States Oil Fund (NYSE:USO), which tracks West Texas Intermediate crude oil, closed down 7.09% at $133.95.
Bitcoin’s Bullish Sentiment A Caution Flag?
Blockchain analytics firm Santiment highlighted a sharp spike in positive crowd sentiment for Bitcoin, with bullish commentary on social media exceeding bearish chatter.
“Historically, however, sharp rises in bullish sentiment tend to act as a caution flag rather than a straightforward buy signal,” the firm noted. “This doesn’t necessarily mean Bitcoin’s rally is over, but it does suggest that risk levels are beginning to rise.”
Daan Crypto Trades, a widely followed cryptocurrency commentator, identified key short-term BTC liquidity levels.
“Above, the $82,400 area still has some left,” the analyst said. “Below, the $80,100 & $78,200 levels are good to watch if price were to trade into them.”
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