Major cryptocurrencies inched lower on Tuesday on higher-than-expected wholesale inflation data for last month.
What Happened: World's largest cryptocurrency, Bitcoin slipped below $62,000, failing to sustain its gains from the previous trading day.
The market dip triggered $144 million in liquidations in the last 24 hours, with long liquidations touching $114 million. Bitcoin led the pack with $39.5 million in liquidations.
The price drop influenced the derivatives market's sentiment as traders taking short positions on Bitcoin sharply increased vis à vis those gunning for price increases in the last 24 hours.
The negative sentiment permeated as the U.S. Bureau of Labor Statistics reported a 0.5% increase in wholesale prices in April, higher than analysts' estimates, lowering expectations of an interest rate cut by the Federal Reserve
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The global cryptocurrency market cap stands at $2.24 trillion, shrinking 2.12% in the past 24 hours.
In contrast, the equities market surged on the day. The Dow Jones Industrial Average added 126.60 points, or 0.32%, to close at 39,558.11. The S&P 500 gained 0.48% to end the trading session at 5,246.68 points. The tech-heavy Nasdaq Composite closed at a record high of 16,511.18, following a 0.75% uptick.
Investors chose not to overreact to the hotter-than-expected wholesale inflation data ahead of the more significant consumer price index data, slated to be released on Wednesday.
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Analyst Notes: According to on-chain analytics firm Santiment, bearish sentiment for large-cap cryptocurrencies was on the rise, as they failed to recover strongly. The firm also blamed Coinbase’s recent downtime for fueling the FUD.
However, Santiment added that rising negativity may play a significant role in accelerating a market recovery.
Prominent technical analyst Kevin spotted a falling wedge pattern for Bitcoin, noting, "BTC is currently compressed between a ton of support and resistance and it’s gonna pop one way or the other within days."
The researcher pointed out that an upward breakout from this zone may propel the coin to $68,400, exceeding which could lead to price discovery. To the contrary, a breakout to the downside might see Bitcoin plummeting to $50,000–$52,000.
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