The cryptocurrency market is experiencing a notable downturn today, with major digital assets declining in value during the early trading hours of the US Sessions. The overall market capitalization has fallen by more than 3%, reaching $3.69 trillion as of the time of this report, according to data from CoinMarketcap.
Bitcoin and Ethereum Face Price Declines
Bitcoin (BTC), the largest cryptocurrency by market capitalization, has recorded a 4.04% loss within a single day. This decline occurred despite a substantial 72% surge in trading activity, which saw over $54.91 billion in volume. This indicates that a significant portion of this activity involved traders and investors selling their holdings.
Currently, Bitcoin is trading at $105,769, a decrease from its intraday high of $110K and well below its all-time high (ATH) of $126K, which was reached early last month.
Ethereum (ETH) has also been affected by the selling pressure, dropping below the $4,000 mark and falling to $3,500. This represents a 7.21% decrease, with $43 billion in trading volume recorded over the past 24 hours. Consequently, Ethereum's market capitalization has declined by 7.17%, now standing at $431 billion.
Federal Reserve Official Hints at No Further Rate Cuts
The market sell-off appears to be linked to recent signals from the U.S. Federal Reserve regarding its stance on future interest rate adjustments. In a recent statement, Fed Chair Jerome Powell indicated that the possibility of another rate cut in December is not a certainty.
This statement has had the effect of easing pressure on the U.S. dollar and diminishing investor appetite for riskier assets, including cryptocurrencies. Treasury Secretary Scott Bessent, in a recent CNN interview, also expressed concerns that the Fed's tight monetary policy has slowed down certain sectors of the economy, particularly the housing market, and may have "driven parts of the economy into recession." These remarks have contributed to investors taking profits from recent gains, adding further pressure to the market.
Massive Liquidations and ETF Outflows Exacerbate Sell-Off
Data from CoinGlass reveals that over $1.16 billion has been liquidated from the market as a direct consequence of the sell-off, impacting more than 300,000 traders. Of this total liquidation, $1.07 billion originated from traders who had bet on long positions, while $89.09 million came from sell positions. Ethereum experienced $85 million in forced liquidations, and Bitcoin recorded $74.6 million.
In addition to liquidations, Bitcoin exchange-traded funds (ETFs) have witnessed substantial withdrawals. According to data from Fairside, U.S. spot Bitcoin ETFs experienced total outflows of $1.15 billion last week, with BlackRock, ARK Invest, and Fidelity being among the leading funds experiencing these outflows.