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Why Cryptocurrencies Are Down Today – All the Reasons Why
- The cryptocurrency market has maintained its capitalization of over $2 trillion.
- The wait for the FOMC and CPI reports contributed to the decline of cryptocurrencies.
THE cryptocurrency market has suffered a massive decline in the last 24 hours, with millions of dollars wiped off the market cap.
The drops in Bitcoin [BTC] AND Ethereum [ETH] have played a significant role in this recession.
More specifically, the upcoming US Federal Open Market Committee (FOMC) meeting and Consumer Price Index (CPI) reports have largely contributed to the decline of the two largest crypto assets.
The reason why cryptocurrencies are falling today
AMBCrypto’s analysis cryptocurrency market capitalization on CoinMarketCap it has seen a notable decline in recent days.
Over the past 48 hours, the market cap has fallen from over $2.5 trillion to around $2.47 trillion as of this writing.
Also, the liquidation chart Coinglass showed that the cryptocurrency liquidations on June 11th were quite significant. The chart indicated that long positions experienced more liquidations than short ones as prices fell sharply.
Source: Coinglass
The long settlement volume was over $221 million, while the short settlement volume was approximately $37 million.
Bitcoin and Ethereum lead the market decline
Watching Bitcoin on a daily time frame shown, AMBCrypto saw it decline by over 3% on June 11th. The chart indicated that this drop brought the price down to around $67,377.
The BTC liquidation chart revealed that this drop led to a liquidation volume of over $66 million.
Source: TradingView
Specifically, long settlements accounted for over $52 million, while short settlements exceeded $14 million.
Ethereum, over the same time frame, showed a decline of almost 4.6% as its price fell to around $3,500. The liquidation chart showed that over $69 million had been liquidated due to the decline.
Of these, long settlements accounted for approximately $62 million, while short settlements exceeded $7 million.
Source: TradingView
CPI and FOMC cause panic
Historically, when consumer price index (CPI) data is released or the Federal Open Market Committee (FOMC) adjusts interest rates, the cryptocurrency market often experiences significant fluctuations.
This is because investors adjust their risk exposure in response to these economic indicators. Typically, an increase in the consumer price index correlates with a decline in the price of Bitcoin.
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The increase in essential goods reduces the amount of people’s disposable income, leading to a decrease in cryptocurrency investments.
The FOMC is expected to keep current interest rates between 5.25% and 5.50%. Meanwhile, the consumer price index is expected to show a modest increase, remaining within a range of 0.1% to 0.3%.