Bitcoin and Ethereum traded below key psychological levels on Sunday evening as the global cryptocurrency market cap fell 1.1% to $1.82 trillion.
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Why It Matters: Bitcoin traded a bit flat over the weekend with relatively thinner volumes. At press time, the apex coin was below the $40,000 level.
Risk assets are under pressure with stock futures trading lower ahead of a hectic earnings week on Sunday. The S&P 500 and Nasdaq futures were 0.3% and 0.4% down, respectively, at press time.
Expectations for a half percentage point rate hike in the central bank’s May meeting are baked in after the U.S. Federal Reserve Chair Jerome Powell said last week it was “absolutely essential” to restore price stability.
Alternative.me’s “Crypto Fear & Greed Index” flashed “Extreme Fear” at press time. The index has remained unchanged from last week.
On Friday, Bitcoin saw some support around the $40,000 level, which is an “encouraging sign,” according to OANDA Senior Market Analyst Craig Erlam.
Cryptocurrency trader Michaël van de Poppe tweeted, “Slightly in favor the market goes up the next week.” He said that it is crucial that Bitcoin holds the $38,000 to $39,000 region.
As Ethereum moves to a proof-of-stake model, the rate of staking is set to surge, according to Delphi Digital. This increase in staking is expected post “The Merge.”
Total Ethereum Stake and Block Rewards Vs Annualized Tips — Courtesy Glassnode
The Merge is a reference to a merger between the cryptocurrency’s mainnet and the beacon chain proof-of-stake system.
The independent research firm said in a note, seen by Benzinga, that currently nearly 9.7% of the total ETH supply is being staked.
“All staked ETH will remain out of circulation until another upgrade finally happens after The Merge is complete. As a result, staking will continue to be a significant supply sink for ETH into the foreseeable future,” said Delphi Digital.