December 3, 2023

The turmoil in the crypto market entered the third week of September as most cryptocurrencies started the week on a bearish note. The total crypto market cap fell below $1 trillion again, with several cryptocurrencies registering double-digit declines in the past 24 hours.

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Leverage The ongoing bearish turmoil for crypto traders has led to nearly half a billion liquidations in the past 24 hours. Data from Coingglass shows that 130,087 traders were liquidated with a total liquidation value of $431.51 million. Bitcoin (BTC) leverage traders lost $44.5 million, followed by ether (ETH) traders with total liquidations of $8.39 million.

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With the average difference between long and short liquidation volume being 10X, long traders made up a significant portion of the losses on most exchanges.

Liquidation on various exchanges Source: Coingglass

The current market turmoil is being attributed to a number of macroeconomic factors, including the recently released Consumer Price Index (CPI) data released on September 13, which showed that inflation is yet to calm down. . Within minutes of the release of the CPI data, the price of BTC fell by almost $1,000. Since then, the market has shown some willpower to move ahead over the weekend, but Monday saw another bloodbath.

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The Fed is expected to hike rates following higher CPI data at its upcoming meeting on September 21. Market pundits have predicted that the rate hike – a measure to control rising inflation – could be the biggest in 40 years.

See also  The Market Pines for a Fed Pivot. Why It Isn’t Likely Soon.

According to the CME Fedwatch tool, the market has now fully priced a minimum 75-basis-point increase for the fed funds rate and is not discounting the possibility of 100 basis points. The Fed’s first such action since the early 1980s would be a 100-point increase.

This is why a 0.75% Fed rate hike for bitcoin and altcoins could be bullish

The recently concluded Ethereum merge was also blamed by many as a “rumour buy, sell news” phenomenon where the price of ether (ETH) soared to $2,000 in the run-up to the merge, but now It has been rejected for $1,300 post merge.

With the stock and crypto markets seeing a similar bearish trend, popular trader Clark pointed to a similarity to the current market conditions of the 1970s.

In his tweet, Clarke said that the market could again be bullish at the end of the year in the months of November and December. Thus, the cryptocurrency market could see another bullish rally by the end of 2022 along with the stock market.