Bitcoin and Altcoins Face Downturn Amidst Anticipated US CPI Data and $300 Million Liquidation in Crypto Market

Bitcoin and Altcoins Face Downturn Amidst Anticipated US CPI Data and $300 Million Liquidation in Crypto Market

Crypto News – As anticipation builds for the upcoming US CPI data, market analysts are predicting a potential decline in Bitcoin’s value to $37,500 in the near future. This comes as altcoins are facing increasing selling pressure.

Just a week after a major celebration in the cryptocurrency world, commonly referred to as “Satoshi Street,” both Bitcoin (BTC) and its alternative counterparts are now witnessing a downturn. This shift is part of a broader market correction exceeding 3%.

Bitcoin itself has seen a notable decrease, dropping by as much as 7.5% to a low of $40,521. It has since regained some ground, reducing its loss to 4%, with its current trading price hovering around $42,095. Currently, Bitcoin is experiencing a decline of 3.37%, with its price at $42,357 and a market capitalization of $828 billion.

In a significant development, data from CoinGlass reveals that nearly $300 million worth of long positions have been liquidated in just the past four hours, affecting the broader crypto market. This liquidation has been more pronounced in the small-cap altcoins.

This year, Bitcoin has gained considerable momentum, partly due to expectations of regulatory approval for the first US spot Bitcoin exchange-traded funds (ETFs). Such approval could expand the pool of potential cryptocurrency investors.

Additionally, there’s been speculation about potential interest rate cuts by the Federal Reserve in the upcoming year, further fueling the rise in virtual currencies. Richard Galvin, co-founder of Digital Asset Capital Management in Sydney, commented to Bloomberg:

“Market leverage had increased significantly. The current downturn appears to be more of a market deleveraging rather than being driven by any fundamental news.”

Investors are also bracing for major events this week, including the release of US inflation data and the final policy meeting of the Federal Reserve for 2023. These events could impact the market, especially regarding the speculated rate cuts.

Tony Sycamore, a market analyst at IG Australia Pty, views profit-taking as a rational response in the current scenario. He expects that any further declines towards the $40,000 to $37,500 range will likely attract buyers looking to capitalize on the price dip.

Altcoins, in particular, are facing a steeper drop. These minor cryptocurrencies, including Ether, XRP, Polkadot, and Avalanche, have enjoyed significant price rallies over the past week. However, this uptrend seems to have paused, at least for the moment.

The top 100 digital assets index has seen a drop of around 4%, marking the most significant decline since November 22. Ether (ETH) has fallen by over 4%, and other tokens such as FLOW, CRO, APETHETA, XTZ, NEO, TON, KAVA, and PYTH have experienced 24-hour declines exceeding 10%.