- In a spectacular display of financial gymnastics, over $800M was liquidated from the crypto market in just 24 hours, as Bitcoin and its merry band of altcoins took a nosedive.
- This delightful dip was brought to you by a cocktail of macro-economic factors and the usual volatility that seems to have taken up permanent residence in the U.S. stock market.
On the 27th of January, the cryptocurrency market decided to play a game of limbo, with Bitcoin [BTC] sliding below the illustrious $100,000 mark to a rather humble $98,543 at the time of this riveting report.
Meanwhile, the top two altcoins, Ethereum [ETH] and Ripple [XRP], decided to join the party, dropping by 8% and 10% respectively, as if they were trying to outdo each other in a race to the bottom.
This delightful downtrend triggered a veritable avalanche of liquidations, with over $800M disappearing faster than a magician’s rabbit, affecting more than 316,000 traders who probably wished they had stayed in bed that day.
As if that wasn’t enough, this bearish trend coincided with a series of macroeconomic factors that seemed to send everyone into a panic, as if they had just seen a ghost in a dark alley.
FOMC Meeting on Interest Rates
The Federal Open Market Committee (FOMC) is gearing up for its first meeting of the year on the 29th of January, where they will decide whether to keep interest rates as they are or to shake things up a bit.
During this meeting, the Federal Reserve will make a decision that could send shockwaves through the financial markets, much like a cat jumping onto a keyboard.
According to the ever-reliable CME FedWatch Tool, a staggering 99.5% of investors are holding their breath, hoping that interest rates will remain unchanged at 4.25% to 4.5%, which suggests that inflation is still lurking around like an unwanted houseguest.
FOMC meetings have a knack for affecting crypto prices, as interest rate decisions can either entice investors to dive into risk assets or send them running for the hills. So, if the rates stay the same, we might just witness a selloff that could make a stampede look like a leisurely stroll.
US Futures Market Dips
Another delightful reason for the crypto market’s dip is the decline in the U.S. stock futures market, which seems to be having a bad day as well.
At the time of this report, NASDAQ Futures were down by around 2.5%, while the S&P 500 futures decided to shed 1.49%, as if they were on a diet.
This drop was triggered by the successful debut of a Chinese AI startup, DeepSeek, which has managed to topple ChatGPT and claim the top spot on the iOS App Store, leaving tech companies like Nvidia feeling a bit queasy.
Unlike ChatGPT, which relies on Nvidia for its training chips, DeepSeek has opted for a more budget-friendly approach, using fewer and decidedly inferior chips. This could spell trouble for Nvidia’s share in the AI market, which is about as comforting as a wet sock.
Dips in the U.S. stock market tend to have a ripple effect on crypto prices, so if the U.S. market opens with this negative sentiment, we might just see further downward pressure that could make gravity jealous.
Tech Earnings Could Fuel Volatility
Top tech companies, including the ever-controversial Tesla, are set to release their earnings this week, which could stir the pot of volatility even further. In its Q3 earnings report, Tesla revealed it was holding onto 11,509 BTC, which is a number that sounds impressive until you realize it’s just a number.
Traders will be watching to see if this position remains unchanged, as any sell-off could send prices tumbling faster than a toddler on a sugar high.
Other highly anticipated earnings reports are from the likes of Microsoft and Apple, whose performances could also have a significant impact on cryptocurrency prices, much like a butterfly flapping its wings in a hurricane.
Despite all these concerns,
Read More
- EigenLayer restaking protocol’s slashing testnet now live
- 3 Spider-Man Villains That Should Appear in the Next PlayStation Game
- FIL PREDICTION. FIL cryptocurrency
- POL PREDICTION. POL cryptocurrency
- Marvel Rivals Season 1 is bringing the Fantastic Four — here’s the Invisible Woman in action
- Will GOAT’s latest 31% hike finally push it above $1 on the charts?
- Grantchester season 9 cast: Meet the characters in ITV drama
- EastEnders airs huge Cindy Beale update in early iPlayer edition
- Whales and retail traders keep Arbitrum from falling — Here’s how
- Looks Like DOOM 64 Is Getting a Native PS5 Port
2025-01-28 01:48