Markets

Bitcoin (BTC) price pullback to $66,000 triggers $250 million cryptocurrency liquidations. Traders prepare for FOMC and CPI report

Published

on

Cryptocurrencies plunged into correction on Tuesday with bitcoin (BTC) plunging to near $66,000 as traders prepare for Wednesday’s key U.S. inflation report and Federal Reserve meeting.

Bitcoin (BTC) started the session near $70,000 before hitting a three-week low of $66,170 during the US session. It rebounded slightly to near $66,500, but was still down almost 5% over the past 24 hours.

Altcoins saw even bigger pullbacks during the same period, with the broad-based crypto market benchmark CoinDesk 20 down more than 6%, with all twenty constituents in the red. Ethereum Ether (ETH) fell below $3,500 and was down 6.5%, while Solana (GROUND)dogecoin (DOGE)that of Cardano ADA and Chainlink LINK suffered losses of 6 to 9%.

The sudden withdrawal resulted in over $250 million in liquidations of leveraged derivatives trading positions across crypto assets, CoinGlass data shows, marking the second significant leverage chase in a week following Friday’s $400 million liquidations.

Liquidations occur when an exchange closes a leveraged position due to a partial or complete loss of the trader’s initial money, or “margin”, because the user fails to meet margin requirements or does not have sufficient funds to maintain the position open.

One reason behind the pullback is investors “de-risking” crypto assets ahead of tomorrow’s Consumer Price Index (CPI) report and Fed meeting, hedge fund said QCP in an update.

Bitcoin could see a volatile session on Wednesday as it has been “very responsive” to recent economic data and its 30-day correlation with U.S. stocks rose to its highest level since 2022, K33 Research noted in a market update from Tuesday.

“The stage is set for a frenzied macroeconomic Wednesday, with May CPI data and the Fed’s interest rate decision poised to move the market,” K33 analysts said .

Investors will be watching the interest rate outlook from members of the Federal Open Market Committee (FOMC) – the so-called “dot plot” – to see how many rate cuts policymakers are planning for this year in light of the recent tough inflation numbers and weaker economic data.

“The FOMC dot plot, along with the forward guidance given during Jerome Powell’s press conference, will likely be the biggest price-determining factors as BTC returns to paying attention to market rate expectations of interest.”

Market watchers noted some positive signs during the selloff that could point to a quick recovery.

Bitcoin saw several pullbacks this year before the FOMC meetings, only to reverse the trend shortly after, pseudonymous crypto analyst Gumshoe pointed out in a statement. Message.

Bitcoin futures open interest on crypto exchanges BitMEX and Binance deviated earlier today, crypto analytics platform CryptoQuant published citing pseudonymous trader BQYoutube. “This kind of phenomenon is often observed when whales [on] BitMEX Starts Accumulating Positions While Binance Retail Gets Destroyed,” the job added.

“Despite near-term headwinds, we believe this could be a good opportunity to accumulate coins,” QCP said.

Fuente

Leave a Reply

Your email address will not be published. Required fields are marked *

Información básica sobre protección de datos Ver más

  • Responsable: Miguel Mamador.
  • Finalidad:  Moderar los comentarios.
  • Legitimación:  Por consentimiento del interesado.
  • Destinatarios y encargados de tratamiento:  No se ceden o comunican datos a terceros para prestar este servicio. El Titular ha contratado los servicios de alojamiento web a Banahosting que actúa como encargado de tratamiento.
  • Derechos: Acceder, rectificar y suprimir los datos.
  • Información Adicional: Puede consultar la información detallada en la Política de Privacidad.

Trending

Exit mobile version