Bitcoin’s Plunge Triggers Massive Liquidations
Bitcoin’s price fell to $64,600 during early Asian trading hours on Tuesday, leading to the liquidation of leveraged positions worth $480 million. According to data from Coinglass, 190,144 traders were liquidated in the past 24 hours, with long positions accounting for $420 million of the total liquidations.
The majority of these long liquidations, approximately $372 million, occurred on major exchanges such as Binance, OKX, and HTX. At the time of writing, Bitcoin has slightly recovered and is trading above $65,700. However, this dip in Bitcoin has also caused a significant downturn in the altcoin market.
Altcoins Suffer as Market Turns Red
The broader cryptocurrency market has followed Bitcoin’s downward trajectory, with major altcoins experiencing substantial declines. Ethereum (ETH) has dropped nearly 4% in the past 24 hours and is currently trading at $3,450. Other popular altcoins, including Solana (SOL), Toncoin (TON), and Cardano (ADA), have seen declines of 8%, 6%, and 8% respectively.
Meme coins have fared even worse, with Dogecoin (DOGE) down nearly 10%, trading at $0.1221. Shiba Inu, PEPE, Dogwifhat, and Floki have also plummeted by over 10% in the last 24 hours.
Federal Reserve Plans Limited Rate Cuts in 2024
Last week, the Federal Reserve maintained its benchmark interest rate at 5.25% to 5.5%, the highest level in 23 years, citing the need for more evidence of cooling inflation. Despite some recent easing, inflation remains above the Fed’s 2% target, with a 3.3% annual rise in consumer prices reported for May, slightly down from April’s 3.4%.
Fed Chairman Jerome Powell noted “modest” progress in reducing inflation but emphasized that price increases remain high. As a result, the Fed plans only one rate cut in 2024, a reduction from the previously forecasted three cuts. Powell stated that while recent Consumer Price Index reports are encouraging, more evidence is needed before loosening monetary policy.
Conclusion
Bitcoin’s recent dip has triggered significant liquidations and market turmoil, with altcoins and meme coins also suffering substantial losses. Meanwhile, the Federal Reserve’s cautious approach to interest rate cuts highlights ongoing concerns about inflation, adding another layer of complexity to the current financial landscape.
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