Markets
Cryptocurrencies fall as investors await Fed decision, bitcoin falls below $67,000
Cryptocurrencies collapsed Tuesday as bitcoin extended its recent decline and investors awaited the Federal Reserve’s next rate decision.
The price of bitcoin was last down 3% at $67,582.34, according to Coin Metrics, extending a decline that began Friday when bitcoin retreated from the $70,000 level. Earlier today, it fell to $66,140.67.
Ether fell 4.8% to $3,496.32. Cryptocurrencies as a whole, as well as cryptocurrency-related stocks, were in the red. Coinbase And MicroStrategy were each down more than 2%.
Bitcoin’s losses may have been triggered by a wave of long liquidations, which force traders to sell their assets at market prices to settle their debts. Over the past 24 hours, $56 million in long bitcoin liquidations took place on centralized exchanges, according to CoinGlass.
The market saw another $56 million in long bitcoin liquidations on Thursday, ahead of a better-than-expected result. May U.S. Jobs Report Friday. Bitcoin fell back below $70,000 after briefly testing the level from earlier this month.
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Bitcoin falls below $67,000
Like stock market investors, crypto traders fear that the Federal Reserve will not cut interest rates this year. The central bank kicked off its two-day policy meeting and is expected to make its decision on Wednesday.
“When stocks sell off, other risk assets follow,” said Bartosz Lipiński, CEO of crypto trading platform Cube.Exchange. “This largely gives the impression that the market is losing confidence that the Federal Reserve will cut interest rates soon…and that greater fears about the impact of long-term high rates are beginning to take hold .”
“A review of options positioning shows that long-term expectations favor a rally,” he added. “But for now, we may continue to see volatility until we have a clearer picture of the Fed’s plans for the rest of the year.”
Lipiński also said that the massive sales last Tuesday and Friday are further evidence of the continuing “unease” in the market.
“Even though spot ETH ETFs appear poised to hit the US market, there has been no real catalyst to drive prices higher,” he said. “Bitcoin’s underlying fundamentals are strong, with supply being hoarded by ETFs, but sentiment has yet to catch up.”