Leading cryptocurrencies retreated further on Wednesday as investors awaited the crucial inflation report for guidance on the direction of interest rate cuts.
Crypto Bloodbath Continues
Bitcoin fell below $60,000 for the first time since October 24, as trading volume popped 40% over the last 24 hours. The apex cryptocurrency is now down more than 51% from its record highs.
Ethereum fell to an intraday low of $1,550 before paring some of its losses overnight. XRP and Dogecoin also traded in the red.
Nearly $1 billion was liquidated from the cryptocurrency market in the last 24 hours, with $800 million in bullish long positions alone wiped out, according to Coinglass data
Bitcoin’s open interest rose 0.37 over the last 24 hours. An increase in open interest, alongside a drop in spot price, typically signals that new short sellers are entering the market, hoping for the decline to continue.
“Extreme Fear” sentiment intensified, returning to levels seen earlier this month, according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $2.09 trillion, representing a 2.74% decline over the last 24 hours.
Stocks Fall Alongside
Stocks extended their slide on Wednesday. The S&P 500 fell 0.10% to end at 7,358.22, while the tech-heavy Nasdaq Composite dipped 0.43% to settle at 25,476.6. The Dow Jones Industrial Average was the outlier, rallying 182.06 points, or 0.35%, to end at 51,848.90.
Investors will closely watch Thursday’s Personal Consumption Expenditures price index report, considered the Federal Reserve’s preferred measure of inflation, for guidance on the central bank’s interest rate policy.
The CME Group’s FedWatch tool showed markets pricing a 50% likelihood of the Fed increasing rates during the September meeting.
Why This Level Is A ‘Battleground’ For BTC
Rekt Capital, a widely followed cryptocurrency analyst and trader, warned that Bitcoin’s daily close below the red-shaded band, around $60,000, and a subsequent bearish retest could confirm further downside.
On-chain analytics firm CryptoQuant highlighted that Bitcoin’s drop below $60,000 triggered a “new wave of panic” among some investors, prompting them to move their BTC back to exchanges, representing “persistent” short-term selling pressure.
“The $60,000 level has gradually become a genuine battleground, where the confrontation between weak hands and strong hands is at its most intense,” the firm added.
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