The cryptocurrency market saw a sell-off in US hours on Wednesday as investors braced for uncertainty following a recent rebound in the broader cryptocurrency market, with the market capitalization falling nearly 2.50% to $2.57 trillion.
The price of Bitcoin fell by 1% in an hour, causing the price of Bitcoin to fall to $69,500 by more than 2% in the past 24 hours. Trading volume has fallen by more than 35% in the past 24 hours after the recent surge.
Ethereum price is also down 3% in the past 24 hours despite positive progress in the spot ETF, with other altcoins including Solana, XRP, Dogecoin, Cardano and Shiba Inu all down 2-3% in one hour. Today’s leaders such as PEPE, BOOK OF MEME, GALA and WIF also fell by 3-6%. Let’s check why the market is down.
The prices of Bitcoin, Ethereum and Meme have fallen
The cryptocurrency market witnessed a massive sell-off following the release of UK inflation data. The UK’s annual inflation rate fell to 2.3% from 3.2% last month, but came in more than 2.1% ahead of expectations. Although inflation came in below market expectations, the pound rose as UK inflation approached the Bank of England’s 2% target.
As a result, the US Dollar Index (DXY) was volatile today but fell after the UK inflation data. However, the US 10-year Treasury yield (US10Y) saw an unusual increase of 0.027% to 4.457%. This has led to Bitcoin remaining volatile despite lower trading volumes.
Furthermore, the release of today’s FOMC meeting minutes has traders taking a cautious approach after many Fed officials considered that inflationary pressure could still delay or reduce the number of Fed rate cuts this year. CME FedWatch shows a 49.5% probability of a 25 basis point rate cut in September.
Coinglass data revealed that the cryptocurrency market saw $40 million worth of liquidations in the past few hours, with a total of $180 million liquidated over the course of 24 hours. Notably, $125 million worth of long positions and $55 million worth of short positions were liquidated in the past 24 hours, with Ethereum, Bitcoin, Pepecoin, Solana, and Dogecoin topping the liquidation numbers.
More than 64 thousand traders were liquidated and the largest single liquidation order occurred on cryptocurrency exchange BitMEX where $4.26 million worth of XBTUSD was traded. This caused the cryptocurrency market to decline slightly in the past few hours.
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Analysts detect sell signals
John Bollinger, the inventor of Bollinger Bands, expects Bitcoin to consolidate or decline due to a two-bar reversal at the upper border of the Bollinger Band. However, it is not bearish, but a short-term concern.
Popular analyst Ali Martinez also revealed that the TD Sequential indicator is now showing a sell signal on Bitcoin’s daily chart. Traders are advised to trade Bitcoin with caution.
Hence, Bitcoin could see a sell-off in the coming dew days. Altcoins are likely to see a pullback due to profit taking after the recent rally.
Furthermore, open interest for BTC futures on CME continues to decline after a 3% decline over the past 24 hours. Total open interest in BTC futures decreased by 2% in the last 24 hours. Open interest for XRP, DOGE, and PEPE futures are declining significantly, while other altcoins have seen some buying.
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