Bitcoin Suffers Largest Daily Plunge to Sink Below $22.6K as Fed Meeting Looms.
Bitcoin experienced its largest single-day percentage drop since November, dipping below $22,600 at one point on Monday. The largest cryptocurrency was trading around $22,720, with a 4.5% decrease after reaching over $23,900 on Sunday.
The cryptocurrency Ether also decreased by 5% and was trading around $1,550. The CoinDesk Market Index showed a 4.8% decline for the day. The last time Bitcoin suffered a similar loss was on November 9th, with a 14% decrease, according to TradingView data.
Over $44 million worth of Bitcoin long positions were liquidated in the past 24 hours, contributing to a decline in the broader cryptocurrency market, according to Coinglass data.
This decline was also reflected in crypto-related stocks, causing investor unease. The exchange company Coinbase closed with an 8% decrease, and the Bitcoin miner Marathon Digital Holdings experienced a 10% drop. The decline in Bitcoin is thought to be due to Wall Street’s defensive stance ahead of major risk events this week, including the U.S. Federal Reserve’s Federal Open Market Committee meeting.
The meeting is expected to result in a 25 basis point interest rate hike, although some analysts believe a 50 basis point hike is still possible due to concerns about inflation. Bitcoin’s recent inability to break past $24,000 further highlights these concerns. Edward Moya, a senior market analyst at foreign exchange Oanda, stated that inflation risks need to subside for crypto to have any stability amid regulatory and contagion fears.
He added that Bitcoin has significant resistance at $24,000, and if risk aversion continues, the downward momentum might not find support until $21,000.