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Cryptocurrency News Articles

Bitcoin and Ethereum Nosedive as Economic Data Douses Interest Rate Cut Expectations

Jan 08, 2025 at 10:43 am

Bitcoin fell to $96,200 late afternoon before dip-buying propelled the leading cryptocurrency up a few notches. This comes a day after it hit $100,000 after a gap of more than two weeks.

Bitcoin and Ethereum Nosedive as Economic Data Douses Interest Rate Cut Expectations

Major cryptocurrencies declined on Tuesday evening as the latest economic data seemed to dampen expectations regarding interest rate cuts.

What Happened: Bitcoin dropped to $96,200 late afternoon, but dip-buying appeared to help the leading cryptocurrency recover somewhat. This occurred a day after it hit $100,000 following a gap of over two weeks.

Ethereum saw a steeper decline as the second-largest cryptocurrency lost nearly 8% of its value in 24 hours, plunging to $3,880.

Cryptocurrency liquidations hit $559 million in the last 24 hours, marking the highest level since Dec. 2020. Of this total, over $500 million was attributed to long liquidations.

Top traders on Binance appeared to be buying the dip, with over 63% of them showing a net long position on Bitcoin, compared to 36% shorting the cryptocurrency.

About $555 million in short positions faced the risk of liquidation if Bitcoin rebounds to $100,000.

The downturn shifted the market sentiment from "Extreme Greed" to "Greed," as indicated by the Crypto Fear & Greed Index.

Top Losers (24-Hours)

The global cryptocurrency market capitalization decreased by 5.29% to $3.39 trillion in the last 24 hours.

Stock market equities experienced a sell-off on Tuesday. The Dow Jones Industrial Average closed down 178.20 points, or 0.42%, at 42,528.36. The tech-heavy Nasdaq Composite slipped 1.89% to end at 19,489.68, while the S&P 500 dropped 1.11% to 5,909.03.

The decline came after a report showed that the U.S. services sector grew more than expected in March, but a sharp increase in the Prices Index raised concerns regarding inflationary pressures.

According to the CME FedWatch tool, traders priced in a 95% chance that the current interest rate range of 4.25%-4.50% will remain unchanged, up from 91% the previous day.

As equities sold off, yields on risk-free debt rose. The benchmark Treasury yield hit 4.69, which was its highest level since late April.

See More: Best Cryptocurrency Scanners

Analyst Notes: Popular cryptocurrency analyst Michaël van de Poppe commented on Bitcoin's latest correction.

"Couldn’t hold above $98-100,000 and we’re dropping down. Likely this is going to give a period of consolidation," the analyst predicted.

However, he added that once the correction ends, the entire market will rally, with altcoins showing the "strongest bounces."

The chop on #Bitcoin continues. Couldn't hold above $98-100K and we're dropping down. Likely this is going to give a period of consolidation.

Correction over? Bounce on the entire markets, strongest #Altcoins have the strongest bounces.

Ali Martinez, a widely followed cryptocurrency expert, highlighted the importance of $97,000 as support for Bitcoin.

"If this support holds, BTC may rebound. A break below $97,000, however, could open the door for a dip to $92,000," Martinez projected.

The TD Sequential indicator flashes a buy signal on the #Bitcoin $BTC hourly chart, right above the setup trend line and the 200-hour MA, near $97,000. If this support holds, #BTC may rebound. A break below $97,000, however, could open the door for a dip to $92,000. pic.twitter.com/jevgNgKyEf

A photo by CMP_NZ on Shutterstock

News source:www.benzinga.com

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