Leading Cryptocurrencies Drop as Federal Reserve Minutes Paint a Bearish Outlook for Risk-on Assets

What Happened: Bitcoin dipped below $93,000 during the afternoon hours before swinging back above $94,000 overnight.

Leading cryptocurrencies dropped further on Wednesday as Federal Reserve minutes painted a bearish outlook for risk-on assets.

Bitcoin price movements: Bitcoin dipped below $93,000 during the afternoon hours before swinging back above $94,000 overnight. The leading cryptocurrency has now corrected sharply from the highs of $102,000 hit earlier in the week.

Ethereum fell to an intraday low of $3,209, its lowest since Dec. 20. The downtrend triggered liquidations of over $539 million in the last 24 hours, with more than $400 million in upside bets getting wiped out.

Bitcoin's Open Interest dropped 3.21% in the last 24 hours. A drop in Open Interest, coming alongside a drop in price, also indicated the liquidation of long positions.

Despite this, over 63% of traders on Binance were going long, according to the Long/Short Ratio, suggesting that they were buying the dip.

The market sentiment remained one of "Greed," according to the Crypto Fear & Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market capitalization stood at $3.34 trillion, down 1.63% in the last 24 hours.

Stocks recovered after Tuesday’s slump. The Dow Jones Industrial Average gained 106.84 points, or 0.25%, to close at 42,635.20. The S&P 500 added 0.16%, ending at 5,918.25. The tech-focused Nasdaq Composite was the outlier, dipping 0.06% to 19,478.88.

These moves coincided with the release of minutes from the Dec. 18 Federal Reserve meeting, which indicated a slower pace of rate cuts through 2025.

Yields on U.S. sovereign debt rose again. The benchmark 10-year Treasury yield hit 4.7%, its highest since late April.

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Analyst Notes: Widely followed cryptocurrency analyst Ali Martinez said Bitcoin needs to reclaim $100,000 to invalidate the bearish narrative and resume its march to new all-time highs.

In an earlier post, Martinez highlighted the strong resistance offered to the leading cryptocurrency between $98,000 and $100,000.

On the other hand, #Bitcoin $BTC must reclaim $100,000 to invalidate the bearish outlook and set its sights on new all-time highs.https://t.co/9jCXGS06zP

Michaël van de Poppe, another popular cryptocurrency market commentator, underlined his points of interest on the Bitcoin chart.

"I expected the markets to break out and start the bull at $100,000, but nope," Van De Poppe said. "Likely taking liquidity beneath the lows and revert back upwards. $90-92,000 is the region."

Two points of interest remain the same on #Bitcoin.

I expected the markets to break out and start the bull at $100K, but nope.

Likely taking liquidity beneath the lows and revert back upwards.

$90-92K is the region. pic.twitter.com/ZrPmrkyFlf

Photo by Igor Faun on Shutterstock