Bitcoin Drops Below $63K; Fed Decision Risk Weighs
By Laxmikant Khanvilkar
Virtual digital assets (VDA) witnessed a significant increase in volatility during the past 24-hours as sharp decline in the price of Bitcoin (BTC), the largest cryptocurrency by market capitalisation, has had a domino impact on other cryptocurrencies.
Bitcoin slumped below $63,000 mark due to the huge outflow from Grayscale’s GBTC coupled with investors repositioning ahead of the Federal Reserve’s meeting. The U.S. central bank decision will be a guiding force in the near term. Currently, bitcoin was changing hands at at $62,826 losing 6.91%.
Bitcoin suffered a sharp correction in price after hitting record high, just shy of $74,000 last week. The correction followed hotter-than-expected inflation readings in the U.S. last week, which could curb the central bank’s willingness to ease their monetary policy, further delaying interest rate cuts.
Adding further pressure is Grayscale’s Bitcoin Trust (GBTC) recording an outflows of over $640 million.
The drop in Bitcoin’s price had a cascading effect on other cryptocurrencies. Major altcoins like Ethereum (ETH) and Solana (SOL) .
Ethereum (Ether), the second largest cryptocurrency by market capitalisation, has moved further away from the recent high. It dropped below $3,300 mark and was recently trading at $3,223, down 6.8%.
Elsewhere, meme coins including Floki Inu (FLOKI), Bonk Inu (Bonk), and Dogecoin (DOGE), also suffered losses.
The global crypto market cap decreased 7.9% to $2.35 trillion in the last 24 hours. On the other hand, the total crypto market volume rose 40.7% to $189 billion. Total volume in DeFi is currently $16 billion, and all stablecoins are $175 billion, representing 8.5% and 92.5%, respectively, of the total crypto market 24-hour volume. Bitcoin’s dominance is currently 52.2%, unchanged over the day.
The IC15 index, the barometer of the top fifteen tokens, slumped 7.5% to 80,342.
Meanwhile, the slide in VDA prices resulted in over $440 million worth of liquidations for traders of crypto futures. Traders who had leveraged positions betting on higher prices faced significant losses. Most of these liquidations occurred on Binance, totaling $212 million, followed by OKX at $170 million. Despite its price correction, Bitcoin retains substantial gains of over 26% and 132% in the past thirty days and year-to-date timeframe, respectively.
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