Early Monday morning at the start of the Asian trading market, a steep drop in the cryptocurrency market’s values was witnessed. The top three cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and XRP, dipped by 7 percent to 12 percent in value.
The global cryptocurrency market cap also shed over 7 percent, going from 3.61 trillion dollars to 3.35 trillion dollars, losing a staggering 260 billion dollars in under a day.
Moreover, the Crypto Fear & Greed Index has also from Greed to Neutral today with a score of 55. This indicates that investors’ attentiveness has shifted slightly to the pessimistic side of the spectrum.
Crypto Market Plummet: Altcoins, Bitcoin, ETH, and XRP Values Dip
Bitcoin’s price, right now, is sitting at 98 thousand dollars which implies a 7 percent drop in the last several hours. Furthermore, XRP’s price has also seen a drop and now stands at two point seventy eight dollars, which is a twelve percent decline
Whereas Ethereum has dropped to three American dollars. Analysts are predicting that the crypto market is going to continue its downtrend as the recent crash seems to not have any indications of stopping.
FOMC Meeting and Tariffs During Donald Trump’s Presidency
Compounding inflation and buoyant employment, both signals of a robust US economy, are forcing markets to tread carefully.
The prospect of tariffs on the economy due to Trump winning the elections has made this sentiment even worse. In this situation, the Federal Reserve has more room to avoid rate cuts in the meeting from January 29.
The CME FedWatch tool shows a 99.5% probability that the Federal Reserve will not change rates, currently 4.25% – 4.50%. The tone of the central bank’s policy and the statements from Jerome Powell are likely to be the most important for the crypto and stock markets.
Also, the dollar index DXY has risen sharply to 107.74 undelining a stronger dollar, while the Treasury 10-year yield has dipped slightly to 4.569%. Bitcoin price has always moved inversely to the DXY and Treasury yields which added more pressure on crypto prices.
Bitcoin, ETH and XRP Take a Hit: Crypto Market Suffering from a Market Crash
Within the last 24 hours traders losses over 800 million along with 290,000 other supporters of cryptocurrency. Coinglass reports further explain that the largest single liquidation order for BTCUSDT on HTX exchange was 98.64 million dollars.
Major cryptocurrencies like btc, ETH, DOGE, XRP and UNI suffered the most losses. Wide currency long positions are being greatly affected along with short positions due to impending liquidation, with over 800 million dollars of Losses claimed in the last 12 hours. These losses include the long positions also.
9.5 billion dollars for Bitcoin and Ethereum options are bound to expire on Friday. Deribit has stated that 78,000 in BTC options estimated at 7.7 billion dollars have a maximum pain point of 98,000.
Which in turn causes fear for further downturns. Calendars show BTC options are prone to further losses during the years end which opens the path to losing traders further profit.
There are 565,000 options with an estimation of 1.8 billion that are bound to suffer the same fate, where maximum pain positions at $3,400 because ETHs current rate sits at $3,073. It is likely these changes, if coupled with increased trading activity will lower ETH even further.
Temporary Bearish Signs in On-Chain Data
The on-chain data pertaining to Bitcoin indicates loss of strength as the 30-day MVRV ratio has entered the danger zone.
This suggest that BTC prices are about to drop significantly before attempting to rally again which is a sign for traders to cash out profits.
On-chain analyst Axel Adler Jr pointed out that aforementioned Taker order bearish pressure has hit an extremely high value of $1.6 billion in the last 24 hours. The last time it was this high was 1.8 billion dollars in the beginning days of January.
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