Crypto Market Faces Pressure Amid $670M Liquidations, Pre-halving Bitcoin Retraces and Upcoming Fed Meeting
In Brief
Bitcoin and the wider crypto market faced significant pressure, continuing the downward trend observed last week.
Decentralized cryptocurrency Bitcoin (BTC) and the wider cryptocurrency market have faced significant pressure, continuing the downward trend observed last week. Bitcoin’s price has declined by another 6% over the last 24 hours, testing support at $61,000, while Ethereum (ETH) has dropped by 8%, testing support at $3,000. Altcoins are experiencing a deeper correction, with investors anticipating a potential rebound.
According to data from Coinglass, approximately $670 million worth of assets were liquidated within the last 24 hours, constituting one of the most substantial liquidation events seen in the past two weeks. Nearly $500 million in long positions and $170 million in short positions were liquidated.
The broader cryptocurrency market has experienced a significant decline, losing approximately $600 billion since reaching a peak of $2.9 trillion last week. Cryptocurrencies, including Ethereum, Binance Chain (BNB), and Dogecoin (DOGE), recorded losses during this period.
Analysts at K33 Research suggest that the liquidation of bullish derivative positions may not have concluded yet, potentially presenting a significant hurdle to any rapid recovery in the digital asset market. According to Anders Helseth, head of research and Vetle Lunde, senior analyst at K33 Research, there remains a significant risk for continued heightened downward volatility resulting from long liquidations.
Bitcoin Hovers Near Two-Week Low Amid Declining ETF Inflows, Pre-halving Retraces and Fed Rate Cut Uncertainty
Bitcoin remained near its lowest level in roughly two weeks, exhibiting weak performance influenced by declining inflows into the spot Bitcoin ETFs, witnessing $326.2 million in outflows yesterday, marking the largest outflow since their introduction.
Furthermore, Bitcoin has entered a zone of retraces that historically preceded its halving event. However, according to the Rekt Capital analyst, the ongoing correction reflecting a decrease of -16% is still considered “insignificant” compared to four declines of more than 20% observed in 2023.
Another factor contributing to the restrained market sentiment surrounding cryptocurrency is the decreasing likelihood of interest-rate cuts in the United States. It is anticipated that during the upcoming meeting this week, the Federal Reserve will refrain from indicating an immediate rate cut. During the two-day policy meeting of the Federal Open Market Committee, interest rates are expected to remain within the range of 5.25% to 5.5%, marking a two-decade high initially reached in July.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
