Bitcoin’s Decline and Market Impact
Bitcoin, the leading cryptocurrency, dropped to $64,600 during early Asian trading hours on Tuesday, causing the liquidation of leveraged positions worth $480 million. According to Coinglass data, 190,144 traders were liquidated in the past 24 hours, resulting in total liquidations of $480.93 million, with $420 million being long positions.
Approximately $372 million in long positions were liquidated on exchanges such as Binance, OKX, and HTX. At the time of writing, Bitcoin has slightly recovered, trading above $65,700. This decline in Bitcoin also led to a significant drop in altcoins, with Ethereum falling nearly 4% to $3,450.
Source: Coinglass
Altcoins Suffer as Market Turns Red
Prominent altcoins such as Solana (SOL), Toncoin (TON), and Cardano (ADA) have experienced declines of 8%, 6%, and 8% respectively.
Top meme coins have seen even larger drops in the last 24 hours. Dogecoin (DOGE), trading at $0.1221, is down nearly 10%. Other meme coins, including Shiba Inu, PEPE, Dogwifhat, and Floki, have fallen by over 10%.
Federal Reserve’s Interest Rate Strategy for 2024
Last week, the Federal Reserve maintained its benchmark interest rate at 5.25% to 5.5%, the highest in 23 years, emphasizing the need for more evidence of cooling U.S. inflation.
Since July 2023, rates have remained steady, with inflation still above the Fed’s 2% target despite some recent easing.
The government reported a 3.3% annual rise in consumer prices for May, slightly down from April’s 3.4%. The Fed acknowledged “modest” progress in reducing inflation but noted that price increases remain high.
As a result, the Fed now plans only one rate cut in 2024, down from an earlier forecast of three. Fed Chairman Jerome Powell indicated that while the latest Consumer Price Index report is promising, more evidence is required before any monetary policy loosening can occur.
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