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Bitcoin’s rapid correction amplified selloffs in altcoins market 

Bitcoin lost its $62K price level considering the imminent Federal Reserve meeting, which ends today, and will likely determine whether the crypto market’s correction is over. The largest cryptocurrency by market valuation saw a sharp decline on Thursday after reaching several new all-time highs in recent weeks, just shy of $74,000. 

 

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It dropped more than a tenth of its value to trade at $61.5K  pulling down other digital assets. The crypto market’s correction came after a hot U.S. inflation data report last week, which might make the U.S. Fed less inclined to loosen monetary policy and postpone interest rate reductions, thereby considerably moderating appetite for risk assets. 

Investor caution appears to have kept the market muted ahead of the Federal Open Market Committee’s (FOMC) announcement. Sentiment has been soured by recently released higher-than-expected inflation statistics, which include the Producer Price Index (PPI) and Consumer Price Index (CPI) for the United States. 

Record outflows from the U.S. Spot Bitcoin ETF soured the mood of market participants. Notably, some observers point to this pattern as a cause of the most recent Bitcoin meltdown, indicating possible difficulties in the face of continuous market volatility. Notably, Grayscale’s GBTC experienced an outflow of $642.4 million, the biggest since the token’s founding, surpassing BlackRock’s IBIT’s inflow of $451.5 million. 

Investors now only expect three rate cuts in 2024 instead of the five they had previously predicted due to the latest inflation statistics. There is a 99% chance that interest rates won’t change tomorrow, according to the CME FedWatch Tool.

The increased dominance of Bitcoin to over 52% meant one thing: the altcoins are suffering even more. Ether dropped another 9% in it value and is currently trading at $3,125. 

Solana, which briefly overtook Binance Coin, has since dropped to the fifth-most valuable cryptocurrency asset. It lost over 10% of its value in a single day and is now worth $167. BNB retreated to $509 (-3.5 percent). 

A day’s worth of losses for Dogecoin, Polkadot, Polygon, and NEAR exceeded a tenth of their value.  

The majority of lower- and mid-cap alts shared a similar environment, and the valuation of the entire crypto market has fallen to less than $2.35 trillion at the time of this publication. The metric exceeded $2.9 trillion last Thursday, and over the weekend, it exceeded $2.7 trillion. 

Bitcoin’s price decrease was accompanied by disappointing flows into the U.S.-listed bitcoin ETFs in the last few days, which was partly due to investors being apprehensive of taking risks before the completion of the Federal Open Market Committee (FOMC) meeting 

In the past 24 hours, 187,504 traders were liquidated, the total liquidations come in at $647.17 million. The greatest single liquidation order happened on OKX – BTC-USDT-SWAP valued at $12.25 million 

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ABOUT THE AUTHOR See More
Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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