The crypto market, which dipped slightly a day earlier, slipped further on Wednesday. Popular cryptocurrencies like Cardano (ADA), Ethereum (ETH), Ripple (XRP), Bitcoin (BTC), and several memecoins saw significant price drops.
Over $680 million worth of leveraged trades were liquidated across exchanges over the past day, according to data from CoinGlass. Approximately 77% of them were long positions, indicating that many traders anticipated further price increases.
With Bitcoin reaching a new high of $126,199 on Monday, the week got off to a great start, and other altcoins also saw gains. However, it did not last for a significant period, as a lot of investors started locking up profits by Tuesday. As a result, Bitcoin dropped more than 2.5 percent, closing below $121,500.
Fears of a U.S. government shutdown, which is currently in its second week, worsened the slide even more. The market is under more pressure, and there is less demand for risky assets as a result of the uncertainty, due to which the majority of significant cryptocurrencies are now losing money. The OKX exchange saw the biggest single liquidation, sweeping out a BTC-USDT-SWAP trade valued at $8.74 million.
Market sentiment further deteriorated. With the Fear and Greed Index dropping from 74 on Sunday to 60, it is evident that people are becoming more cautious rather than overly optimistic.
Key U.S. economic updates are currently being watched by traders. Later on Wednesday, the minutes of the Federal Open Market Committee (FOMC) meeting will be made public. On Thursday, Fed Chair Jerome Powell will make remarks. Both are anticipated to provide fresh insights on the Federal Reserve’s interest rate policies, which may have an impact on the value of the US dollar and the demand for Bitcoin and other cryptocurrencies in general.
