The cryptocurrency market is in red again today as major tokens dropped in value during early trading hours of US Sessions. Overall market capitalization, as of the time of writing this report, has fallen more than 3% to $3.69 trillion, according to data from CoinMarketcap.
Bitcoin breaks $106K, ETH drops to $3,500
Bitcoin (BTC), the world’s largest cryptocurrency by market cap, recorded a 4.04% loss in a single day, despite a 72% surge in trading activity, recording over $54.91 billion in volume. This suggests that most of the activity involved traders and investors selling their positions.
Currently, the token is trading at $105,769, down from its intraday high of $110K and well below its all-time high (ATH) of $126K reached early last month.
Ethereum (ETH) did not escape the sell pressure as it lost its grip on $4,000 and fell to $3,500. This is a 7.21% drop, with $43 billion in trading volume over the last 24 hours. As a result, the token’s market cap declined by 7.17% and now sits at $431 billion.
Fed official hints at no further rate cut
The sell-off came after the U.S. Federal Reserve gave hints about its decision on the future interest rate cuts, which investors immediately reacted to. In a recent statement, Fed Chair Jerome Powell said the possibility of another rate cut in December is not “a foregone conclusion.
This statement eased pressure on the U.S dollar and reduced investors’ interest in risky assets, like cryptocurrencies. Treasury Secretary Scott Bessent, in a recent CNN interview, also warned that the Fed’s tight policy has slowed parts of the economy, especially housing. He said it “may have driven parts of the economy into recession.” As a result, investors began to take profit from their recent gains, which added pressure to the market.
Massive liquidations and ETF outflows deepen the sell-off
According to data from CoinGlass, over $1.16 billion was liquidated from the market as a result of the sell-off, with over 300,000 traders affected. Of the total liquidation, $1.07 billion came from traders who had bet on long positions, while $89.09 million came from sell positions. Ethereum saw $85 million in forced liquidations, while Bitcoin recorded $74.6 million.
Additionally, Bitcoin exchange-traded funds (ETFs) saw large withdrawals. According to data from Fairside, U.S. spot Bitcoin ETFs saw $1.15 billion in total outflows last week, led by BlackRock, ARK Invest, and Fidelity.
Also Read: Ripple Launches Digital Asset Spot Brokerage for US Market
