Leading cryptocurrencies fell, even as stocks rallied on Wednesday as investors weighed the latest consumer inflation numbers that came in line with expectations.
Crypto Market Retreats Further
Bitcoinand Ethereum recorded sharp selling pressure, while XRPand Dogecoinalso traded in the red on Wednesday.
Over the past 24 hours, more than $175 million in crypto positions were liquidated, with short sellers accounting for $93 million of the losses, accordingto Coinglass data.
Bitcoin’s open interest rose 0.49% over the last 24 hours. An increase in open interest, along with a price decrease, typically indicates that short positions are being built up.
“Fear” sentiment prevailed in the market, accordingto the Crypto Fear & Greed Index.
The global cryptocurrency market capitalization stood at $2.17 trillion, following a dip of 0.79% over the last 24 hours.
Stocks RallyAfter CPI Report
Major indexes lifted on Wednesday. The S&P 500 rose 0.26% to end at 7,748.50,while the tech-focused Nasdaq Composite gained 0.54% to close at 26,588.49. The Dow Jones Industrial Average,meanwhile, fell 0.04%, or 21.58 points, to close at 53,770.27.
The July Consumer Price Index rose 3.4% from a year earlier, matching expectations, while core inflation eased to 2.5%, also as expected.
Meanwhile, the odds of an interest rate hike in September fell to 40% from 48% the day before, accordingto the CME Fedwatch tool.
The Anatomy of Bitcoin’s Bottom
Michaël van de Poppe, a widely followed cryptocurrency analyst and trader, said Bitcoin risks breaking down to $60,000 if it fails to hold current support near $63,500
“The final level of support is that area; if that doesn’t happen, we’re very likely to be sweeping the lows again,” the analyst projected.
On-chain analytics firm CryptoQuant observes that Bitcoin’s losses have spread beyond speculative traders and are now being borne by long-term holders.
Historically, at each significant cycle bottom, long-term holders have been sitting on more severe unrealized losses than the broader market, the research firm stated.
“Bitcoin is displaying a condition repeatedly associated with macro bottoms, but not yet the emotional and financial exhaustion that made previous bottoms unmistakable,” CryptoQuant added.
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