Leading cryptocurrencies stalled on Wednesday after the Federal Reserve’s preferred inflation gauge came in higher than expected.
Crypto Rally Eases
Bitcoin wobbled between $77,600 and $79,200 as bulls failed to push the apex cryptocurrency back above $80,000. Trading volume plunged 35% over the last 24 hours.
Ethereum surged to $2,500 in the early evening before consolidating, though buying pressure remained subdued. XRP and Dogecoin inched lower.
Cryptocurrency-related stocks also fell, with both Strategy Inc. (NASDAQ:MSTR) and Coinbase Global Inc. (NYSE:BMNR) closing down 2.87%.
Nearly $260 million was liquidated from the cryptocurrency market in the last 24 hours, with shorts outpacing long liquidations, according to Coinglass data.
Bitcoin’s open interest dipped 1.95% over the last 24 hours. A drop in both the spot price and open interest typically indicates that existing long-position buyers are exiting their positions and closing out their trades.
Bitcoin derivatives sentiment remained neutral, with neither retail traders nor whales showing a clear bias.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $2.2 trillion, following a dip of 0.79% over the last 24 hours.
Stocks Rally After Fed Rate Cut But…
Stocks pulled back after Tuesday’s spike. The Dow Jones Industrial Average fell 113.52 points, or 0.21%, to end at 53,463.88. The S&P 500 was broadly unchanged, closing at 7,675.70, while the tech-focused Nasdaq Composite slipped 0.08% to finish at 26,130.20.
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The July Personal Consumption Expenditures price index rose 3.7% year-over-year, against economists’ forecasts of 3.6%. Monthly, the PCE edged up by 0.2%, accelerating from June’s 0.1% contraction and above estimates of 0.1%
Traders now look to Fed Chair Kevin Warsh’s Jackson Hole address on Friday for direction ahead of the Sept. 16 policy meeting. The odds that the central bank will leave interest rates unchanged rose from 60% to 63% in 24 hours, according to the CME FedWatch tool.
Watch Out for These BTC Levels
Michaël van de Poppe, a widely followed cryptocurrency analyst and trader, stated Bitcoin’s structure is “intact” despite the ongoing correction.
“I’m still looking at $76,400/77,100 as potential levels for support,” Van De Poppe remarked. “If those are lost, we’ll see a deeper correction.”
On-chain analytics firm Santiment noted that Bitcoin’s strong rally over the 10 days failed to attract the retail crowd, with weighted crowd sentiment turning negative again as prices recovered.
“Rallies usually drag the crowd along behind them. This one has left it standing,” the firm said.
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