As a seasoned crypto investor with battle-scarred fingers from navigating the rollercoaster that is the cryptocurrency market, I’ve learned to expect the unexpected. The recent sell-off, wiping out $787 million in crypto liquidations across various digital assets, including my beloved Dogecoin, has become a familiar tune.
Currently, the cryptocurrency sector is witnessing a massive sell-off, resulting in an astounding $787 million disappearing from crypto liquidations across various digital currencies. Notably, Dogecoin (DOGE) was one of the digital assets that took a significant hit, with a loss of approximately $29 million due to crypto liquidations, as per CoinGlass statistics.
The decline could be attributed to the fact that Bitcoin and prominent digital currencies experienced substantial drops in value. It’s possible that broader economic worries and the actions of traders looking to cash in on their profits may have fueled this pessimistic outlook.
The value of cryptocurrencies dropped due to the Federal Reserve’s cautious stance on potential reductions in interest rates, which negatively impacted speculative investments.
On Thursday, I observed a dip in the value of Bitcoin down to approximately $98,698, a notable drop for the world’s most popular cryptocurrency. Interestingly, this slump seemed to affect other digital currencies as well, with Dogecoin among them, indicating a broader struggle within the market.
Over the past 24 hours, Dogecoin’s price has dropped by 6.05%, settling at around $0.365. Earlier today, it dipped to a low of $0.34. As per CoinGlass, this decline led to approximately $24.59 million in long positions being closed out (bullish bets), while short positions were liquidated for about $5.93 million over the same period.
Crypto market sell-off
As a researcher studying the crypto market, I noticed a surge in selling activity recently, which I attribute to the Federal Reserve’s indication of lessening rate cuts. Typically, lower interest rates tend to boost the appeal of riskier assets like cryptocurrencies due to increased demand. However, the Fed’s signal seems to have sent ripples of uncertainty across markets, potentially affecting the crypto market negatively.
On Wednesday, the Federal Reserve reduced its main interest rate by a fraction of 0.25%, marking the third consecutive decrease. However, they cautioned that further reductions might not be likely in the near future.
As a researcher, I’m reporting that, in line with market expectations, the Federal Open Market Committee adjusted its overnight borrowing rate, setting it within a range of 4.25%-4.5%. This new level mirrors where the rate was fixed back in December 2022, a time when rates were on an upward trajectory.
The Federal Reserve, in making a 0.25% reduction, hinted that it might reduce interest rates by approximately two more times in the year 2025. During a press conference following the meeting, Fed Chair Jerome Powell expressed that there is still significant progress required on inflation before any additional relaxation of monetary policy would be considered.
Due to the market drop, a total of $787 million worth of positions were forced to close. Out of this amount, $661 million were long (bullish) positions that had to be sold off, whereas short (bearish) positions accounted for $125 million in liquidations.
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2024-12-19 17:54