The flagship crypto lost about $4K in just a few hours after notes from the Fed’s December FOMC session re-confirmed plans to reduce the balance sheet.
As the dollar strengthened and positive economic data from the U.S. shook investors’ grip on risky financial assets, bitcoin dropped to $42.5K with record-selling observed in the early hours of Thursday.
An intraday sell-off was triggered after the Federal Reserve indicated a rate hike may occur in March rather than the usual timeframe.
More than $800 million worth of trading positions were liquidated during the day, with 207,527 traders liquidated. $10 million worth of XBTUSD was liquidated on Bitmex.
As investors rush to safe-haven currencies, others are turning to alternative cryptocurrencies (altcoins) like Solana, XRP, and Polkadot, which are down more than 10%.
For now, despite the spotlight on altcoins, buying pressures have declined in both Bitcoin and Ethereum. If BTC does not break back above $45K, the market may experience an extended bear period in which it could retrace to the low $30K range.
Crypto market capitalization is $2.04 trillion, down 8.53% since yesterday. However, activity is on the surge as the total crypto market volume for the day is $122 billion, an increase of 18.25%.
At present, bitcoin dominates the market with 39.74%, up by 0.39% since yesterday. BTC’s dominance ratio – or the measure of BTC’s market capitalization in relation to all crypto – continued to decline on Wednesday, reaching 39%. This is the lowest ratio since April 2018, when crypto markets were in a bear market