– The crypto market takes a nosedive once more – US Federal Reserve officials stand their ground to keep raising interest rates until inflation is contained – Bitcoin drops to $22,000, crashing investor's hopes of recovery – Following the crash, traders liquidate over $500 million in digital asset
The last few days have been more difficult for the crypto market than in previous weeks. The crypto market has shown signs of recovery lately, which is encouraging. However, that road to recovery has been stopped in its tracks. Recently, crypto analytics firm Glassnode released data showing that Bitcoin futures long liquidations had reached a new eight-month high as BTC price crashed below $22,000.
The digital asset market has suffered a substantial drop, resulting in some key support being broken. Bitcoin, attempting to break through the $25,000 resistance level last week, fell below $22,000 to establish a new two-week low of $21,747. In the first few hours of Friday, 157,098 traders were liquidated after weeks of bullish momentum. This caused total liquidations exceeding $551 million. Coinglass’s data alleges that Bitcoin traders lost approximately $203 million while Ether traders lost around $140 million.
Digital assets fell sharply as global markets tumbled following remarks from US Federal Reserve officials who said they would continue to raise interest rates until inflation is subdued. Around $220 million worth of crypto positions were liquidated within an hour on Friday, with Bitcoin accounting for approximately half of that. Long liquidations for BTC futures on OKX reached an eight-month high of $84,934,697.05, which breaks the previous high observed on May 5th of $48,630,183.66.
The economic rebound appears to be floundering as traders have difficulty deciphering the Federal Reserve’s position on interest rates. On Thursday, two Federal Reserve members, James Bullard and Esther George gave opposing views on the size of the next interest rate increase. Both agreed on the necessity to continue increasing borrowing costs.
Attention now shifts to this week’s Federal Reserve’s annual meeting in Jackson Hole, Wyoming. There’s already talk that Fed Chair Jerome Powell will take a more cautious approach than his predecessor Janet Yellen. James Bullard, president of the Federal Reserve Bank of St. Louis, said he would support an interest rate increase of 75 basis points next month. This move could precipitate another economic downturn. A similar rate hike by the Fed in June caused crypto markets to crash after an initial price surge.
Even though the digital market is experiencing a macroeconomic downturn, prices for the most popular crypto projects won’t stay low for long. Only time will tell what direction this new financial field takes.