Why Is the Crypto Asset Market Down Today?

On April 8, the crypto market briefly touched $2.45 trillion before dropping 0.88%, losing $21.12 billion as the euphoria over a ceasefire began to fade due to early violations, ongoing inflation concerns, and capital rotation into stocks instead of digital assets.

Bitcoin
BTCUSD
fell to $71,023, while World Liberty Financial (WLFI) became one of the most lossmaking tokens among actively traded assets, correcting over 13% after their treasury drained the stablecoin lending pool.

Crypto News Today:-

World Liberty Financial's treasury deposited 3 billion WLFI tokens as collateral at Dolomite and borrowed $50.44 million in USD1, causing the entire pool liquidity to be drained. The USD1 deposit interest rate surged to 35.81%, and the loan interest rate rose to 30%, raising concerns of a mass liquidation if WLFI token prices fall further.
Morgan Stanley launched a spot Bitcoin exchange-traded fund (ETF) on NYSE Arca with a fee ratio of 0.14%, making it the cheapest in the market currently. ETF analyst Eric Balchunas projects assets worth US(million in the first year and a first-day volume of US)million, despite the fund entering a market that experienced $6.3 billion in ETF outflows from November to February.
Ethereum Foundation continues converting ETH to stablecoins, selling 3,750 ETH worth $8.3 million at an average price of $2,214 via CoW Protocol. The foundation still holds 1,250 ETH valued at around $2.77 million, allocated for grants and donations.
Crypto Market Dips from $2.45 Trillion as Ceasefire Breaks

Total crypto market capitalization was at $2.39 trillion on April 9, after briefly reaching $2.45 trillion in the previous session. The rally driven by ceasefire news lost momentum as Gulf countries reported attacks on the first day of conflict cessation, and Iran still demanded transit conditions through the Strait of Hormuz. This uncertainty dampened the risk-on sentiment that had pushed the crypto market higher just a day earlier.

Capital rotation accelerated the decline. Stocks actually gained after the ceasefire news, while cryptocurrencies corrected. This pattern repeats, where both asset classes struggle to rally simultaneously during the Iran conflict.

Want daily insights like this? Sign up for the Daily Crypto Newsletter from Editor Harsh Notariya here.

Meanwhile, 24-hour total liquidations reached $272.86 million across 79,415 traders, with long positions liquidated for $170.42 million, about 62% of the total.

The March CPI report due Friday adds an extra layer of caution. If data shows high inflation, expectations for rate cuts will be pushed further back, also pressuring liquidity for speculative assets.

The $2.39 trillion zone at the 0.382 level remains the current market floor. If it falls below, the market could weaken toward $2.33 trillion at the 0.236 level. Conversely, the market needs to reclaim $2.44 trillion and $2.45 trillion to turn bullish again, but the critical area is $2.49 trillion at the 0.618 level. If it surpasses $2.49 trillion, the next targets open up at $2.56 trillion and $2.65 trillion.

If $2.39 trillion holds, market participants who bought during dips might try to push the market back to $2.45 trillion. But if this level breaks, the next target drops to $2.33 trillion.

Bitcoin Cup and Handle Pattern Still Keeps the $81,000 Target Alive

Bitcoin traded at $71,023 on April 9, down about 1% amid overall market pressure. However, the daily chart still offers technical hope. Since late March, BTC has formed a cup and handle pattern. The rounded bottom of the cup formed in late March, and the current consolidation acts as the handle.

This pattern has an 11.46% breakout projection from its neckline. BTC needs a confirmed daily close above $71,673 to break out of the handle. If it closes above $73,272 at the Fibonacci 0.618 level, the cup’s neckline will be pierced, and Bitcoin could move toward the $81,000 zone.

Daily price weakness does not invalidate this pattern. Typically, the handle experiences a correction before a breakout attempt, and the current dip keeps the price within the pattern boundaries. The ceasefire breakdown and CPI fears could prolong the handle, but they won’t invalidate the pattern.

On the downside, $70,074 at the Fibonacci 0.382 level is the first support. A drop below $68,096 would weaken the handle pattern. A breakdown below $64,899 at the cup’s base would fully invalidate it. If daily closes break above $73,272, the target rises to $81,000. But if it closes below $70,074, attention shifts to $68,096.

World Liberty Financial $5 WLFI$30 Drops 13% After Treasury Withdraws Funds from Its Own Lending Pool

World Liberty Financial (WLFI) traded at $0.0916 after falling 13.42% since April 7, making it one of the weakest-performing tokens among active tokens. This sell-off was triggered by specific factors outside the overall market weakness.

On April 8, WLFI’s strategic reserve wallet deposited about 3 billion WLFI governance tokens as collateral at Dolomite and borrowed $50.44 million in USD1, the project’s dollar-pegged stablecoin. This move caused the utilization of the pool to exceed 100%, turning liquidity negative at -232,000 tokens. The USD1 deposit rate surged to 35.81%, and the borrowing rate reached 30%.

The issue is clear. If WLFI’s price drops further, this over-collateralized position risks liquidation, potentially triggering a domino effect in the pool and trapping lenders attracted by high yields.

Technically, WLFI was already bearish before the withdrawal. Its price has been moving within a downtrend channel since mid-February. From February 18 to April 7, the price formed lower highs, while RSI formed higher highs—hidden bearish divergence indicating the bearish trend would continue. This was confirmed as the 13.42% decline followed shortly after.

WLFI must stay above $0.090 at the 0.382 Fibonacci level to avoid further correction toward $0.080 and $0.073. Falling below $0.073 could see the price touch the lower trendline of the falling channel. New strength would emerge if WLFI recovers above $0.096. Surpassing $0.106 would turn the short-term structure neutral.

$0.090 acts as the boundary between potential stabilization and further decline toward $0.073 and the lower part of the downtrend channel under liquidation pressure.

(
)
#GateSquareAprilPostingChallenge
#MetaReleasesMuseSpark