Last Tuesday, the price of Bitcoin surpassed $73,500 per token and was very close to its March all-time highs. Until Thursday, the price of the leading Cryptocurrency remained above $72,000, which suggested that the positive streak would extend for several more days. However, during the day on Thursday, the price of BTC began to retreat, causing a strong correction throughout the crypto market.
At the time of writing, the token has an exchange value of $69,487 per coin, which represents -3.87% in 24 hours. In that same period, liquidations of leveraged positions amounted to $287 million, according to data from the Coinglass portal.
The vast majority of these liquidations occurred among long positions, that is, bullish ones. Among this group, losses in 24 hours are $253.40 million, while short positions lost just over $33 million. The latter had a considerable magnitude as a consequence of the volatility.
The reason for the profit taking in the last few hours was the set of economic data in the United States. Despite this, enthusiasts and investors expect an upward rebound. In that sense, the crypto market correction of the last few hours could be a short-lived factor.
Liquidations of leveraged positions approach $290 million in 24 hours. Source: Coinglass
What will be the depth of this crypto correction?
This week’s economic data was likely behind the pullback in cryptocurrency prices. Among them, PCE inflation in the United States, the favorite index of the Federal Reserve, stands out. In month-on-month terms, prices rose 0.2%, but year-on-year was 2.1% (in August it was 2.3%). The latter would be within the Fed’s expectations, according to CNBC.
On the other hand, the numbers of applications for unemployment aid were notably low. The latter becomes a sign that the economy is in very good condition. In sum, it can be said that these positive numbers rule out an aggressive rate cut by the Fed next week.
This November 6 and 7, the Federal Open Market Committee (FOMC) will meet to establish the new interest rate in the US. A timid cut would practically leave the rate with little variation and its impact on the economy would not be significant in compared to more aggressive trimming.
Such a scenario would have lowered the spirits of equity investors, including the capital that moves in the cryptocurrency environment. This reality even affected investments in the Bitcoin spot ETF sector. Thus, during the previous days, these funds saw huge inflows of $870 million (Tuesday) and $893 million (Wednesday). However, revenue on Thursday was just $32.3 million, according to Farside.
With this in perspective, it can be said that the correction in the crypto market could be more acute. However, next week is also the presidential election and it is possible that event will reverse the current bearish trend.
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