- The crypto crash resumed on Friday as most coins erased earlier gains.
- The top laggards were coins like Kite, Pippin, Ethena, and Lighter.
- This retreat happened amid profit-taking among investors.
The crypto crash resumed on Friday, erasing some of the gains made earlier this week as profit-taking restarted. It also happened as the risk of a new war in the Middle East escalated.
Why the Crypto Crash is Happening Today
Bitcoin price dropped to $65,600 from this week’s high of $68,000. The top laggards were tokens like Kite, Pippin, Ethena, Lighter, Pepe, Uniswap, and Zcash, which all dropped by over 5%. The market capitalization of all coins retreated by over 1.6% in the last 24 hours to over $2.32 trillion.
The ongoing crypto crash is happening as investors book profits after the recent rebound. This profit-taking confirmed that the rebound was a dead-cat bounce as we warned earlier this week. Indeed, a closer look shows that some of the top laggards today were also the top gainers earlier this week.
The retreat also happened as the potential for a war in the Middle East rose. In a statement earlier this week, the US asked its embassy staff in Lebanon to leave the country. And today, the US Embassy in Israel asked its staff to leave. It also issued a travel advisory, raising the possibility of a war.
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The urgency of an action has risen after the Wall Street Journal warned about the deteriorating state inside the USS Ford carrier. It noted that toilets were broken and that many sailors were considering resigning. As such, Trump may want to launch an attack to end the suffering.
A new war in the Middle East would be bearish for Bitcoin and the crypto market. For one, contrary to the popular belief, Bitcoin has proven that it is not a safe haven asset.
Stock Market Retreat Amid Private Credit Jitters
The crypto crash has coincided with the ongoing retreat in the stock market. Data shows that futures tied to the Dow Jones, Nasdaq 100, and S&P 500 indices retreated by over 0.50%.
This retreat is being driven by the ongoing concerns about the private credit industry. Blue Owl, a top player in the sector sent shivers in the market last week after selling a loan portfolio to cover redemptions.
Other companies in the industry have now come under strain. For example, MidCap Financial Investment, a fund managed by Apollo Global Management, slashed its dividend and marked down the value of its assets.
As a result, global credit spreads continued to widen as investment-grade bonds showed some strains. As a result, yield premiums on Asian investment-grade notes were two basis points wider, the highest level since November.
Therefore, there is a risk that the private credit boom is about to bust, which will lead to lower stock prices. Historically, crypto prices normally retreat when the stock market is falling.
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