Bitcoin, Ethereum Subdued, Dogecoin Emerges As Top Gainer: What's Putting Pressure On Apex Coin?

Bitcoin and Ethereum declined Tuesday evening, while Dogecoin emerged as the top intraday gainer, as the global cryptocurrency market cap fell 3% to $2.1 trillion.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: Risk assets continue to be under pressure. On Tuesday, the S&P 500 and Nasdaq closed 1.3% and 2.3% lower, respectively. Two of the largest cryptocurrencies traded in the red at press time.

On Tuesday, comments from two dovish officials of the U.S. Federal Reserve made investors nervous. Lael Brainard, a governor on the Fed’s board said, the central bank will “continue tightening monetary policy methodically through a series of interest rate increases and by starting to reduce the balance sheet at a rapid pace as soon as our May meeting,” reported CNBC.

San Francisco Fed President Mary Daly said inflation at 40-year high levels is as harmful as not having a job. She said most Americans have confidence that the Fed was “not going to let this go forever,” according to CNBC.

“But if you don’t have that confidence, let me give it to you,” said Daly. The official said raising rates was necessary so that people go to bed without worrying.

The dollar index — a measure of the greenback’s strength against six of its peers — rose to 99.526 on Tuesday, the highest level since May 2020. The yield on the benchmark 10-year Treasury notes rose 13.1 basis points to 2.543%, according to a report from Reuters.

Investors shouldn’t be disappointed by the apex coin failing to break out from its latest range, according to Craig Erlam, a senior market analyst with OANDA.

“We're seeing consolidation across financial markets right now and bitcoin is clearly not immune. The breakout could still be a strong signal, but just not the explosive one we're used to in this space,” said Erlam, in a note seen by Benzinga.

Bitcoin is holding a crucial level above $44,700, according to cryptocurrency trader Michaël van de Poppe. Ethereum, on the other hand, has shown a weakness in its latest run, according to the analyst.

Although the market is showing some weakness, the overall structure is still holding a crucial level above $44.7K for #Bitcoin. #Ethereum looks ready for a deeper connection, based on the weakness of the run + the bearish divergences potentially being ready to be played out. pic.twitter.com/7unMN82o9G

— Michaël van de Poppe (@CryptoMichNL) April 5, 2022

There is some major “buy the dip” optimism among investors on social platforms, according to Santiment.

This may not be a major price drop with #Bitcoin down -1.3% over the past 24 hours. However, after quite a bit of #FOMO over the past 2 weeks, there is some major #buythedip optimism on social platforms. This is the largest crowd spike in 3 weeks. https://t.co/vMyQNwlQ6S pic.twitter.com/uYjjoEhLc7

— Santiment (@santimentfeed) April 5, 2022

Glassnode co-founders Jan & Yann pointed to the purchase of $190 million worth of Bitcoin by MicroStrategy Incorporated MSTR as a harbinger of fresh capital entering the market. Other such signs include smaller entities buying Bitcoin in bulk and significant inflows into two Bitcoin ETFs run by Grayscale and Purpose.

MicroStrategy buys an additional $190mn

Smaller entities are buying #Bitcoin in bulk

Significant institutional flows into $GBTC and Purpose #BTC ETF

Fresh new capital entering the market, mitigating the risk of a strong correction. Read more here  https://t.co/puXlRHCMaK pic.twitter.com/B0RU5bAehl

— Negentropic (@Negentropic_) April 5, 2022

Read Next: Elizabeth Warren Thinks Buying Bitcoin Is Like Buying Air, Has This To Say About Dogecoin