Why is the crypto market down today? BTC falls below $42K


  • Early in the Asian morning, Bitcoin led the crypto market decline, currently trading at $42,248. The global crypto market is down 5% to $1.63 trillion.
  • Ethereum and Solana followed BTC in the market decline. ETH trades at $2,244.58, while SOL trades at $69.47.
  • The crypto market correction comes as investors prepare for the latest inflation report and the last Federal Open Market Committee meeting of 2023. Most experts expect core inflation to rise and the Fed to hold rates steady.

The crypto market witnessed a notable downturn, with Bitcoin (BTC) plummeting below the crucial $42,000 threshold. Today, crypto coins were trading in negative territory, as investors remained on the sidelines in anticipation of crucial inflation data. 

Particularly, later this week, the U.S. Labour Department is scheduled to disclose data on the Producer Price Index (PPI) and Consumer Price Index (CPI), both of which are crucial inflation gauges.

Crypto coins are in the red 

The initial decline in Bitcoin (BTC) on Monday morning confirmed the caution advised by the options market the last week.

The crypto perpetual futures market has been brought back into equilibrium with the 4% decline to $42,000, paving the way for a consistent ascension towards the end of the year.

Bitcoin (BTC) is currently trading at $42,248.51 per coin, with a 24-hour trading volume of $24,361,868,873.46. This indicates a -3.77 % decrease in the last 24 hours and a 2.07% gain in the last seven days.

In addition, the global crypto market valuation is $1.63 trillion today, a -4.95% drop in the last 24 hours and an 84.14% change from a year ago. 

Bitcoin has a market cap of $820 billion as of today, reflecting a 50.22% crypto market dominance. Meanwhile, the market cap of stablecoins is $131 billion, accounting for 8.0% of the total crypto market worth.

Ether fell to a low of $2,170 before rising to $2,239. Solana dropped to $66 before recovering to $70. The majority of these losses occurred inside the final 90 minutes.

Solana (SOL) is currently trading at $69.47 with a 24-hour trading volume of $2,998,413,174.42. This indicates a -3.71 % decrease in the last 24 hours and a 7.51% gain in the last seven days.

Today’s Ethereum (ETH) price is $2,244.58, with a 24-hour trading volume of $19,681,582,919.37. This indicates a -4.38% drop in the last 24 hours and a -0.22% drop in the last 7 days. 

According to Coinglass data, 119,271 traders were liquidated in the last 24 hours, for a total of $409.72 million. The greatest single liquidation order occurred on OKX, with a value of $8.23M for BTC-USDT-SWAP.

Why is the crypto market suffering the decline?

Price gaps may arise in the CME futures market for bitcoin as a result of the currency’s trading hours being congruent with those of the United States, which may cause disparities in price between the opening and closing of the market.

The Bitcoin CME Gap at $39,700 pertains to a scenario in which the price of Bitcoin surged on the Chicago Mercantile Exchange, resulting in a void at this level. Historically, gaps of this nature are typically filled, which means that the price will likely revisit this level.

Futures without an expiration date that use a funding rate mechanism to tether perpetual prices to the index price are known as perpetual. Periodic payments of an asset between holders of long (buy) and short (sell) positions constitute funding rates. These rates are computed and gathered by exchanges at eight-hour intervals. 

A perpetual contract that is trading at a premium to current prices indicates a positive funding rate; long positions are in the lead and are compensating short positions to maintain their open positions. A negative rate indicates the opposite.

The notional open interest, which represents the dollar value held in open crypto futures contracts, decreased across the entire market, indicating the same. As of this writing, open interest in XLM, UNI, LINK, and XMR has decreased by double digits over the last twenty-four hours.

Bitcoin’s ascent has been bolstered by the general market anticipation that the United States Federal Reserve will initiate interest rate reductions in the middle of 2024.

In addition, investors are preparing for the final Federal Open Market Committee meeting of 2023 and the subsequent round of inflation data, with most analysts anticipating core inflation improvements and placing bets that the Fed will maintain current interest rates.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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