Leading cryptocurrencies inched lower on Wednesday, as investors remained hesitant to allocate funds to the risky asset class due to fears about inflation and interest rates.
What Happened: Bitcoin, the market bellwether, remained choppy in the $67,000 zone, while the second-largest cryptocurrency, Ethereum, fell below $3,800, effectively reversing all the gains made due to spot ETF hype last week.
The market drop resulted in the liquidation of $152 million worth of positions in the last 24 hours, with long liquidations accounting for 71% of the total. Ethereum led with $38.55 million in liquidations.
Open Interest in Bitcoin futures dropped 0.45% in the last 24 hours, while Ethereum's futures market saw a steeper 2.26% decline.
The price dip shifted the sentiment of the derivatives market, as the number of traders taking bearish bets on Bitcoin increased dramatically when compared to those taking bullish long positions.
Top Gainer (24 Hour)
The global cryptocurrency market cap stands at $2.53 trillion, following a 1.39% decline in the last 24 hours.
The stock market dipped lower Wednesday. TheDow Jones Industrial Average slid 411.32 points, or 1,06%, to end the trading session at 38,441.54. The S&P 500 fell 0.74% to close at 5,266.95, marking its first negative day in the last three sessions. The tech-focused Nasdaq Composite closed 0.58% lower at 16,920.58.
Wednesday's slide was driven by rising treasury yields, with the 10-year Treasury note yield trading at 4.62% as of 8:50 p.m. EDT. The move higher comes ahead of the key personal consumption expenditures price index data on Friday, considered a gauge of inflation in the U.S. economy.
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Analyst Notes: Well-known cryptocurrency trader Crypto Rover drew attention to the rapidly shrinking Bitcoin supply on exchanges, a market shift which is likely to aid an "enormous" bull market.
Prominent analyst Michaël van de Poppe had a slightly different view, highlighting Ethereum spot ETFs trading as a major bullish trigger in the days ahead.
"We’re at the stage where Bitcoin consolidates and Altcoins are waiting for their breakout to come," he asserted. "To me, the trigger is going to be the listing of the Ethereum ETF."
On-chain analytics firm Santiment observed a considerable increase in wallets holding at least 10 Bitcoins in the last five months.
Historically regarded as a key signal in the sector, accumulation by this group precedes price increases. To the contrary, when they sell off, extended bear markets follow.
Photo by Fernando Cortes on Shutterstock
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