The cryptocurrency market has experienced a crash as Bitcoin continues its recent downward trend. Investors are anxiously awaiting the FED's upcoming interest rate decision.
Bitcoin's price fell more than 4% to $66,475, according to data from Coin Metrics. This decline extends the decline that began last Friday when Bitcoin retreated from the $70,000 level.
Losses in Bitcoin may have been triggered by a wave of long liquidations that forced traders to sell their assets at market prices to pay off debts. According to CoinGlass data, $56 million worth of long Bitcoin liquidation took place on central exchanges in the last 24 hours.
Similar to stock market investors, cryptocurrency investors are concerned that the Fed may not lower interest rates this year. The central bank has started its two-day policy meeting and is expected to announce its decision tomorrow. The Dow Jones Industrial Average lost 272 points today, while the S&P 500 fell 0.3%.
Bartosz Lipiński, CEO of crypto trading platform Cube.Exchange, commented on the situation. “When stocks lose value, other risk assets follow,” he said.
“This largely feels like the market is losing confidence that the Fed will cut interest rates anytime soon, and greater fears are beginning to emerge about the impact of higher rates over the long term.”
Lipiński added that looking at option positions, long-term expectations are for a rally:
“For now, we may continue to see volatility until a clearer picture emerges regarding the Fed's plans for the rest of the year.”
He also noted that today's and last Friday's sell-offs are further evidence of the ongoing “malaise” in the market:
“While spot ETH ETFs appear to be on the verge of launching in the US, there has been no real catalyst to push prices higher. Fundamentals for Bitcoin are strong, with supply stocked by ETFs, but sentiment has yet to catch up.”
*This is not investment advice.
