234,807 Traders Liquidated on Latest Bitcoin Pullback, But ECB is Committed to Send It Higher
While Jerome Powell is warning of economic recovery is “far from complete,” The ECB economist promises a “substantial increase in the pace of purchasing.”
The bullish start of the week didn’t last long. After surging to $58,500, Bitcoin started falling on Monday and ended up going to nearly $52,800.
“Not much Bitcoin realized between here and $51k. Would not be surprised if we dipped a bit more. Strongest on-chain support currently at $47,400.”
This correction, meanwhile, has resulted in 234,807 traders getting liquidated in the past 24 hours for $1.62 billion, with Binance in the lead much like always, as per Bybt.
— skew (@skewdotcom) March 23, 2021
From March 13 all-time high of about $62,000, the price of Bitcoin has seen an about 14% pullback. Similar but deeper pullbacks were also seen in January after hitting $40k and then in February following the jump to $58k.
As we reported, historically, March hasn’t been a bullish month for Bitcoin prices. The majority of the time, it has resulted in losses. However, this seasonality does give hope for a bullish April.
This Friday, more volatility would be further shaking Bitcoin prices with 117k Bitcoin options expiring.
— skew (@skewdotcom) March 22, 2021
The stock market isn’t doing that well either, despite Federal Reserve Chairman Jerome Powell affirming after the FOMC meeting last week that they would maintain rates at zero even if the economy overshoots traditional measures of full employment and price stability.
The US dollar index meanwhile went above 92.
Still, Powell didn’t push back on the bear steeping of the Treasury curve. Today yields ebbed lower as in his prepared comments for a congressional hearing on Tuesday morning, Powell said economic recovery had “progressed more quickly than generally expected and looks to be strengthening” but warned that it is “far from complete.” Scott Minerd, Global Chief Investment Officer at Guggenheim Investments wrote,
“Powell is giving conflicting guidance to bond investors. Dovish forward guidance is bullish for the short end, while the Fed’s efforts to lift inflation expectations have been bearish for the long end. The belly of the curve is caught in the middle.”
While investors are faced with the question of whether the sell-off has more room to run, Guggenheim’s analysis suggests “it has largely run its course.”
Inflation. CPI (black) is a lagging indicator, but TIPS (US gov inflation linked bonds) tell you where it is headed. Two year expectations (where CPI will be 2023) now the highest in a decade. Long-term expectations catching up and approaching an 8 year high. pic.twitter.com/nrsUpTQV7D
— Charlie Morris (@AtlasPulse) March 23, 2021
But while the Fed has succeeded in lifting growth and inflation expectations, it faces a different problem of market pricing in premature rate hikes.
In the meantime, European Central Bank is firing the shots with its Chief Economist Philip R. Lane, saying that they are committed to a “substantial increase in the pace of purchasing.” Lane told CNBC,
“The deeper point here is that in a world where essentially lots of central banks have a situation where inflation is too low compared to their target, the universal emphasis and our emphasis has to be to make sure that monetary policy support remains in place until inflation is robustly where we want it to be.”
He further said that the recent US stimulus getting rolled out would be a significant engine for the world economy, boosting global GDP and exports from the euro area.