By
Chimamanda U. Martha
July 2nd, 2024
Bitcoin’s decline triggered a chain reaction, impacting other cryptocurrencies, including Ethereum, which dropped 2.18% to around $3,440, while meme coins like Shiba Inu, PEPE, Dogwifhat, and Floki fell over 10%.
The cryptocurrency market saw a significant drop on Tuesday as Bitcoin (BTC) plummeted and led to a series of liquidations. Bitcoin fell to as low as $64,600 during early Asian trading hours, causing leveraged traders to lose a total of $440 million.
Photo: CoinMarketCap
CoinGlass data shows that leveraged long positions suffered heavily in the last 24 hours. Over $420 million, or 87.5% of all liquidations, were from long bets on Bitcoin. A large group of traders was optimistic about BTC in the short term but was surprised by the sudden price change.
Bitcoin Slide Triggers Crypto Market Selloff
Major platforms like Binance, OKX, and HTX together saw $336 million in long positions wiped out. Despite the damage, Bitcoin has shown some resilience and is now trading above $65,390. However, the broader crypto market continues to feel the effects.
Photo: Coinglass
Bitcoin’s decline caused a chain reaction, affecting other cryptocurrencies, including Ethereum (ETH), the second-largest cryptocurrency, which fell almost 2.18% in the last day and is now trading around $3,440. Popular altcoins like Solana (SOL), Toncoin (TON), and Cardano (ADA) performed even worse, dropping 4.70%, 5.20%, and 6.70%, respectively.
The meme coin sector suffered even steeper declines. Dogecoin (DOGE), known as the “internet currency of dogs,” fell nearly 8.40% in the past 24 hours, currently trading at $0.1219. Other meme coins like Shiba Inu, PEPE, Dogwifhat, and Floki saw even sufficient losses, with drops exceeding 10%.
Fed Rate Hike Holds Back Crypto Market Rebound
The recent market sentiments are partly due to the fight against inflation. Last week, the Federal Reserve decided to keep the interest rate at a 23-year high of 5.25% to 5.5%. This shows that the Fed is being careful about easing monetary policy until there are clear signs of lower inflation.
While inflation has eased a bit, with consumer prices rising 3.3% in May compared to 3.4% in April, it is still above the Fed’s 2% target. Fed Chairman Jerome Powell noted some progress in reducing inflation but said more proof is needed before lowering interest rates.
The Fed now expects only one rate cut in 2024, down from the three previously expected. As the Fed works through the challenges of inflation, investors should expect ongoing uncertainty and possible price swings in the crypto market.