Bitcoin and Crypto Market Face Pressure After FOMC Meeting
The recent FOMC meeting has put significant pressure on Bitcoin and the broader cryptocurrency market. The price of Bitcoin has dropped by 6% and is testing support at $61,000, while Ethereum is down 8% and testing $3,000 support. Investors in the altcoin space are expecting a bounce back after a deeper correction.
$670 Million Liquidated in Crypto
According to data from Coinglass, a massive $670 million worth of liquidations occurred within the last 24 hours. This event is one of the largest liquidation events seen in the past two weeks. Long positions accounted for approximately $500 million of the liquidations, while short positions accounted for $170 million.
The broader cryptocurrency market has suffered a loss of around $600 billion since reaching a peak of $2.9 trillion last week. Tokens like Ether, BNB, and Dogecoin have all experienced losses during this period.
Analysts at K33 Research believe that the liquidation of bullish derivative positions may not be over yet, which could pose a significant obstacle to a quick recovery in the digital asset market. In a note to investors, K33 Researchโs Anders Helseth and Vetle Lunde stated:
โRisks are thus still considerable for continued amplified downside volatility stemming from long liquidations.โ
Bitcoin remains close to its lowest level in about two weeks due to decreasing inflows into Bitcoin ETFs. Concerns about the diminishing likelihood of interest-rate cuts in the United States have also contributed to the subdued market sentiment surrounding the cryptocurrency.
Despite these challenges, large market players continue to accumulate Bitcoins during every dip. Microstrategy recently announced that it purchased an additional 9,245 Bitcoins, bringing its total holdings to 1% of the total BTC supply.
What to Expect from FOMC?
The Federal Reserve is unlikely to signal an immediate rate cut during its upcoming meeting. Instead, it will focus on monitoring persistent inflation rates and the gradual increase in unemployment figures.
The interest rates are expected to remain within the range of 5.25% to 5.5%, which is a two-decade high initially reached in July. The decision on rates and the release of economic forecasts are scheduled for 2 p.m. in Washington. Following this, Chair Jerome Powell will host a press conference 30 minutes later, according to a Bloomberg report.
Key Points:
- The FOMC meeting has put pressure on Bitcoin and the broader cryptocurrency market.
- $670 million worth of liquidations occurred within the last 24 hours.
- The broader cryptocurrency market has lost around $600 billion since its peak.
- K33 Research analysts suggest that the liquidation of bullish derivative positions may continue, hindering a swift recovery.
- Bitcoin remains near its lowest level in two weeks due to decreasing inflows into Bitcoin ETFs and concerns about interest-rate cuts.
- Despite challenges, large market players like Microstrategy continue to accumulate Bitcoins.
- The Federal Reserve is unlikely to indicate an immediate rate cut during its upcoming meeting.
- Interest rates are expected to remain within the range of 5.25% to 5.5%.
Hot Take: Bitcoin Faces Pressure After FOMC Meeting
Bitcoin and the wider crypto market have faced significant pressure following the recent FOMC meeting. The price of Bitcoin has dropped by 6%, testing support at $61,000, while Ethereum has seen an 8% decrease, testing support at $3,000. Despite these challenges, investors in the altcoin space are hopeful for a rebound.
Approximately $670 million worth of liquidations occurred within the last 24 hours, making it one of the most significant liquidation events in the past two weeks. The broader cryptocurrency market has also suffered a loss of about $600 billion since its peak. Analysts believe that the liquidation of bullish derivative positions may not be over yet, posing a potential obstacle to a quick recovery.
Bitcoin remains close to its lowest level in two weeks due to decreasing inflows into Bitcoin ETFs and concerns about interest-rate cuts. However, major players like Microstrategy continue to accumulate Bitcoins during dips. The Federal Reserve is not expected to signal an immediate rate cut during its upcoming meeting but will focus on monitoring inflation rates and unemployment figures.
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