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Cryptocurrencies fell sharply on Tuesday as Bitcoin continued its recent decline and investors awaited the Federal Reserve’s next interest rate decision.
The price is Bitcoin Bitcoin fell more than 4% to $66,475, according to Coin Metrics, extending a decline that began on Friday when Bitcoin dropped from the $70,000 level.
ether It fell 6.1% to $3,452.02. Cryptocurrencies fell broadly along with crypto-related stocks. Coinbase and MicroStrategy Each fell more than 4%, while mining stocks Marathon Digital and Riot Platform Both fell more than 2%.
The Bitcoin losses were likely caused by a series of long liquidations, in which traders were forced to sell assets at market price to settle debts. According to CoinGlass, $56 million worth of long Bitcoin liquidations occurred across centralized exchanges in the past 24 hours.
Markets sold another $56 million in long Bitcoin positions on Thursday ahead of Friday’s much stronger-than-expected U.S. jobs report for May. Bitcoin has fallen back below $70,000 after briefly testing the level earlier in the month.
Bitcoin Drops Below $67,000
Like stock market investors, cryptocurrency traders are also concerned that the Federal Reserve may not cut interest rates this year. The central bank begins a two-day policy meeting and is scheduled to announce its decision on Wednesday. Dow Jones Industrial Average It fell 272 points on Tuesday, while the S&P 500 was down 0.3%.
“When stocks sell off, other risk assets follow,” said Bartosz Lipinski, CEO of crypto trading platform Cube.Exchange. “This feels like the market is losing confidence that the Fed will cut interest rates anytime soon, and concerns about the impact of high interest rates for a prolonged period are starting to grow.”
“A quick look at options positions suggests a longer-term upside is in the cards,” he added. “But for now, volatility may continue until we have more clarity on the Fed’s plans for the rest of the year.”
Lipinski also said the selling spree on Tuesday and last Friday was further evidence of the ongoing “distress” in the market.
“It looks like a spot ETH ETF is about to hit the market in the US, but there’s no real catalyst to drive the price higher,” he said. “The fundamental fundamentals of bitcoin are strong and ETFs are stockpiling supply, but sentiment has yet to catch up.”