Crypto Markets Brace for Impact as U.S. Inflation Data Looms

The cryptocurrency market experienced a turbulent period over the past few days, with Ethereum and Bitcoin prices facing volatility and traders grappling with significant liquidations.

As the market braces for the release of crucial U.S. inflation data, analysts remain skeptical about the prospects of a spot Ethereum ETF approval this year.

TLDR

• Ethereum price failed to break above $3,725 resistance and trimmed gains, consolidating near $3,475 support
• Bitcoin and Ethereum dipped hours ahead of new U.S. inflation data release on 10 April
• Ethereum’s long traders faced $59 million in liquidations on 9 April due to a brief price drop to $3,470
• Analysts are skeptical about SEC approving a spot Ethereum ETF this year
• Bitcoin’s volatility has increased ahead of its halving event on 20 April

Ethereum, the second-largest cryptocurrency by market capitalization, failed to break above the $3,725 resistance level. After reaching a high of $3,726, the price faced rejection and trimmed gains, consolidating near the $3,475 support zone.[1] This price action triggered a spike in long liquidations, with traders who had placed bets in favor of a price rally being forced to exit their positions.

According to data from Coinglass, Ethereum’s long liquidations on 9 April reached a weekly high of $59 million, while short liquidations totaled less than $7 million. The brief price drop to around $3,470 fueled this surge in long liquidations, as traders’ positions were forcefully closed due to insufficient funds to maintain them.

The volatility in the cryptocurrency market comes as investors await the release of new U.S. inflation data at 8:30 a.m. Eastern Time on 10 April. Both Bitcoin and Ethereum dipped in the hours leading up to this crucial economic report, with Bitcoin trading just below $69,000 and Ethereum changing hands for just over $3,500.

While Bitcoin and Ethereum have seen gains compared to last week’s start, with Bitcoin up 4.3% and Ethereum up 6.3% over the past seven days, the market remains on edge. Bitcoin’s volatility has increased ahead of its highly anticipated halving event on 20 April, when the reward paid to miners will be cut from 6.25 to 3.125 BTC.

Amidst this market turbulence, analysts have expressed skepticism about the prospects of a spot Ethereum ETF being approved by the U.S. Securities and Exchange Commission (SEC) this year. Speaking at the Paris Blockchain Week crypto event, VanEck CEO Jan van Eck stated,

“We were the first to file as well for Ethereum in the U.S., and we and [Ark Invest CEO] Cathie Wood, are kind of the first in line for May, I guess, to probably be rejected.”

CoinShares CEO Jean-Marie Mognetti, whose company recently acquired the Valkyrie Bitcoin Fund, shared a similar view, saying, “I don’t see anything being approved this side of the year.” The skepticism stems from concerns about the regulatory treatment of proof-of-stake cryptocurrencies like Ethereum.

As the market navigates these challenges, traders and investors will closely monitor the impact of the U.S. inflation data release and the upcoming Bitcoin halving event.

While dips in the market may present attractive entry points for some, the volatility and uncertainty surrounding regulatory approvals add complexity to the investment landscape.