Bitcoin Pullback to $66K Triggers $250M in Crypto Liquidations as Traders Brace for ‘Wild Wednesday’ of FOMC, CPI Report

Cryptocurrencies entered a deeper correction on Tuesday, with Bitcoin {{BTC}} falling to around $66,000 as investors prepare for Wednesday’s major U.S. inflation report and Federal Reserve meeting.

Bitcoin {{BTC}} started the day trading near $70,000 and then hit a three-week low of $66,170 during the US session. It recovered slightly to $66,500 but is still down about 5% in the last 24 hours.

Altcoins saw even deeper pullbacks during the same period; The broad-cap crypto market benchmark CoinDesk 20 Index was down over 6%, with all twenty components in the red. Ethereum’s ether {{ETH}} is down 6.5%, falling below $3,500, while solana {{SOL}}, dogecoin {{DOGE}}, Cardano’s ADA, and Chainlink’s LINK are down 6%-% He suffered 9 losses.

According to CoinGlass data, over $250 million in liquidations of leveraged derivatives trading positions across all crypto assets have seen a sudden pullback, marking the second significant leverage inflow in a week after Friday’s $400 million liquidation.

Liquidations occur when an exchange closes a leveraged position due to partial or total loss of the investor’s initial money or “margin” due to the user not meeting margin requirements or not having enough funds to keep the position open.

Crypto liquidations (CoinGlass)

Hedge fund QCP said in its update that one of the reasons behind the pullback was that investors were “de-risking” their crypto assets ahead of tomorrow’s May Consumer Price Index (CPI) report and the Fed meeting.

K33 Research noted in Tuesday’s market update that Bitcoin could see a choppy session on Wednesday as it is “highly sensitive” to recent economic data, with its 30-day correlation with US stocks rising to the highest level since 2022.

“The stage is set for a wild macro Wednesday, with both May CPI data and the Fed’s interest rate decision poised to move the market,” K33 analysts said.

Investors will be watching the Federal Open Market Committee (FOMC) members’ interest rate outlook, called a “dot plot,” to see how much rate cuts policymakers are predicting for this year in light of recent sticky inflation readings and weak economic data.

“The FOMC dot chart, along with forward guidance during Jerome Powell’s press conference, will likely be the most important price determinants as BTC resumes the market’s interest rate expectations.”

Market observers noted some positive signs during the sell-off that could indicate a rapid recovery.

Fake crypto analyst Gumshoe noted in an

The story continues

This place is a scam dump.

4 FOMCs took place in 2024

each had the same fraud transcript

BTC dropped 10% in the 48 hours before all this

FOMC saved the entire move on the day

The market always prices in extreme bearish statements, then reverses pic.twitter.com/oFa801csND

— gumshoe (@0xGumshoe) June 11, 2024

Crypto analysis platform CryptoQuant reported that Bitcoin futures open positions on crypto exchanges BitMEX and Binance diverged earlier today, citing fake trader BQYoutube. “Such events usually occur when whales [on] BitMEX begins accumulating positions as Binance retail sells out,” the post said.

“Despite the short-term headwinds, we think this could be a good opportunity to save money,” QCP said.