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Cryptocurrencies collapse as investors await the Fed’s decision, bitcoin drops below $67,000
Cryptocurrencies fell Tuesday as bitcoin extended its recent fall and investors awaited the Federal Reserve’s next rate decision.
The price of bitcoin fell more than 4% to $66,475, according to Coin Metrics, extending a decline that began Friday when bitcoin retreated from the $70,000 level.
Ether fell 6.1% to $3,452.02. Cryptocurrencies in general, along with cryptocurrency-related stocks, were in the red. Coinbase AND MicroStrategy each fell by more than 4%, while miners Digital marathon AND Riot control platforms both lost more than 2%.
Bitcoin’s losses may have been triggered by a wave of long liquidations, forcing traders to sell their assets at the market price to pay off their debts. According to CoinGlass, $56 million in bitcoin long liquidations have occurred on centralized exchanges in the past 24 hours.
The market saw another $56 million in bitcoin long liquidations on Thursday, ahead of a better-than-expected outcome US employment report for May Friday. Bitcoin fell below $70,000 after briefly testing the level earlier in the month.
See graph…
Bitcoin drops below $67,000
Like stock market investors, cryptocurrency traders fear the Federal Reserve may not reduce interest rates this year. The central bank kicked off its two-day policy meeting and is expected to give its decision on Wednesday. THE Dow Jones industrial average It lost 272 points Tuesday, while the S&P 500 fell 0.3%.
“When stocks sell off, other risky assets follow,” said Bartosz Lipiński, CEO of cryptocurrency trading platform Cube.Exchange. “It largely appears that the market is losing confidence that the Federal Reserve will cut interest rates any time soon… and greater concerns about the impact of high rates over the longer term are starting to take hold.”
“A look at options positioning shows that long-term expectations are for a rally,” he added. “For now, though, we may continue to see volatility until there is a clearer picture of the Fed’s plans for the rest of the year.”
Lipiński also said that last Tuesday and Friday’s sales were further evidence of the market’s continued “malaise”.
“Despite spot ETH ETFs seemingly on the verge of coming to market in the US, there has been no real catalyst to push prices higher,” he said. “Underlying fundamentals are strong for bitcoin, with supply accumulating from ETFs, but sentiment has yet to catch up.”