Cryptocurrency markets steadied after a bruising 24 hours that saw bitcoin’s latest milestone crumble under pressure. “BTC fell from above $123K to near $121K, followed by another wave of selling that pushed it below $119K,” the CoinSwitch Markets Desk said.
The decline was steep, reflecting selling pressure. After touching lows close to $117K, the price began to recover gradually, regaining ground through the later part of the day. BTC now has moved back above $119K, showing some buying interest, though the rebound remains modest compared to the earlier falls, said CoinSwitch Markets.
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The drop followed comments from U.S. Treasury Secretary Scott Bessent that the government has “no plans to make further Bitcoin purchases for its Bitcoin and digital asset reserve,” remarks that he later softened by saying the department was still exploring “budget-neutral options to acquire Bitcoin for the Strategic Bitcoin Reserve.”
Liquidations and ETF outflows deepen sell-off
More than $1 billion in leveraged positions were wiped out in the past 24 hours after hotter-than-expected U.S. Producer Price Index data dampened hopes for imminent Federal Reserve rate cuts. Long positions accounted for $866 million of the liquidations, dwarfing the $140 million in shorts, according to CoinDesk. Ether traders took the biggest hit at $348.9 million liquidated, followed by bitcoin at $177.1 million.
BTC exchange-traded funds recorded $292.9 million in outflows during the sell-off. Among altcoins, dogecoin dropped 9% to $0.2316, leading losses, while Solana’s SOL, XRP, and BNB Chain’s BNB fell between 3% and 7%.
Policy signals and derivatives market response
Bitcoin’s slide from its $124,089 peak to below $117,500 triggered $227 million in leveraged liquidations on bullish positions, but derivatives metrics remained steady. The BTC futures annualized premium held at 9%, within the neutral 5%–10% range, suggesting the record was not fueled by excessive leverage. Still, data from Trading View pointed to a lack of confidence in a rally toward $150,000.
Market participants are now watching U.S. economic data and Federal Reserve commentary closely, with September seen as the next major inflection point for policy. According to the CME FedWatch tool, the implied probability of the Fed cutting rates to 3.75% or lower by January 2024 has slipped to 61% from 67% a week earlier, underscoring the cautious tone across risk assets.
Ethereum and Institutional moves
Ethereum fell 2.5% over the past 24 hours, briefly approaching $4,800 before settling near $4,600. CoinSwitch noted that Wall Street giant Citigroup is weighing plans to offer cryptocurrency custody and payment services “seeking to capitalize on a market strengthened by recent U.S. regulatory approvals and pro-industry legislation.”
Also read | 5 Wall Street moguls who dismissed Bitcoin as a fad — Guess what they’re saying now!
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