The crypto market took a sharp turn lower in the past 24 hours, erasing gains made after the recent Bitcoin halving. The global market cap shed over $110 billion, dropping to $2.36 trillion.

Short-Term Jitters

Bitcoin (BTC) failed to maintain momentum and dipped below $64,000 due to a lack of trading volume and rising uncertainty. Altcoins like Ethereum (ETH), Solana (SOL), XRP (XRP), Cardano (ADA), Dogecoin (DOGE), Toncoin (TON), and Shiba Inu (SHIB) also fell between 5-10% in the last day.

Options Expiry Pressures Market

The upcoming expiry of $9.4 billion in monthly crypto options contracts is causing anxiety among traders. Over $6.3 billion worth of Bitcoin options are set to expire on Deribit on Friday, with a put-call ratio of 0.68, indicating a recent rise in bearish bets.

Similarly, Ethereum options with a notional value of $3.1 billion are nearing expiry, with a put-call ratio of 0.49.

US PCE Inflation Data on Watch

This week is packed with crucial economic data releases, including GDP and inflation figures. Investors are particularly focused on Friday’s Personal Consumption Expenditures (PCE) inflation data, a key gauge for the US Federal Reserve.

Economists predict a slight increase in annual PCE inflation to 2.6%, but core PCE inflation is expected to decline from 2.8% to 2.6%.

Leveraged Positions Fuel Liquidations

The prevalence of high-leverage positions in the crypto market is causing significant liquidations as prices fall. Coinglass data reveals over $220 million liquidated across the market in the recent pullback, with long positions accounting for 85%. Bitcoin alone witnessed $44.6 million in liquidated positions within 24 hours.

Samourai Wallet Arrests Add Uncertainty

The recent arrest of Samourai Wallet’s CEO and CTO by the US Department of Justice (DOJ) further rattled investor confidence. This incident, coupled with ongoing geopolitical tensions in the Middle East, contributed to the market decline.

Looking Ahead

Despite the short-term turbulence, the Fear and Greed Index still indicates a bullish sentiment (72) among crypto investors. The derivatives market also reflects increased activity, with trade volume surging 30% in the past 24 hours. The success of upcoming upgrades and broader market sentiment will influence the crypto market’s future trajectory.

Overall, the crypto market is experiencing a period of consolidation after the Bitcoin halving. Options expiry, inflation data, and regulatory actions are creating short-term headwinds. However, long-term investor sentiment remains optimistic.