Bitcoin (BTC) experienced a rollercoaster of volatility as it climbed to a four-week high of $64,800 during the early hours of Monday’s Asian trading session, before facing a sharp rejection. This volatility followed a relatively quiet weekend, where BTC hovered around $63,000.
After the U.S. Federal Reserve cut key interest rates by 0.5% last Wednesday, Bitcoin’s price rallied in response, jumping above $64,000 on Friday morning. The rate cut, aimed at stimulating economic activity, provided a boost for crypto markets, especially Bitcoin, as investors saw the move as favorable for riskier assets like cryptocurrencies.
Despite the initial bullish momentum, Bitcoin struggled to maintain its upward trajectory over the weekend, remaining within a narrow range of $63,000. However, Monday morning brought renewed volatility. BTC first dipped to $62,400, bounced back above $64,000, only to slip once more before surging to $64,800—a level not seen in weeks. Unfortunately for the bulls, the rally was short-lived, as bears quickly stepped in to push the price back down. At the time of writing, BTC is trading just below $64,000.
The Liquidation Effect – 60,000 Traders Wiped Out
The heightened volatility in Bitcoin’s price movement has had a severe impact on over-leveraged traders. According to data from CoinGlass, more than 62,000 traders were liquidated within a 24-hour period, with the total value of liquidated positions soaring to $165 million. This highlights the risk of trading in such a volatile market, especially for those using leverage to amplify their positions.
Among the most significant liquidations was a massive $2.73 million Ethereum (ETH) position on Binance. Ethereum itself has followed a similar pattern to Bitcoin, rising over 2% on Monday to trade above $2,650.
Altcoins Ride Bitcoin’s Volatility Wave
The price fluctuations in Bitcoin rippled through the broader cryptocurrency market. Ethereum (ETH) and Binance Coin (BNB), two of the largest altcoins, followed Bitcoin’s lead but saw relatively stronger gains. ETH rose above $2,650, while BNB neared the $600 mark, gaining over 2% in the last 24 hours.
A Test of Market Sentiment
The market’s reaction to the Federal Reserve’s rate cut and Bitcoin’s price movements have showcased the fragility of current market sentiment. While the Fed’s move could indicate a longer-term bullish trend for cryptocurrencies, Bitcoin’s inability to sustain its gains hints at underlying market uncertainty.
As Bitcoin continues to trade in a volatile environment, all eyes will be on whether the bulls can push the price above $65,000 and maintain it, or if the bears will maintain their grip, leading to further downward pressure.
Also Read: China’s Crypto Ban Has Little Impact As 55% of Bitcoin Hashrate Still Controlled by Chinese Pools
For now, the cryptocurrency market remains in flux, with traders bracing for more turbulence in the days ahead.
Bitcoin’s recent price action illustrates the volatile nature of the cryptocurrency market, especially in the wake of macroeconomic events like interest rate cuts. As the market reacts, over-leveraged traders face significant risks, with thousands liquidated as Bitcoin’s price oscillates between key levels. While some altcoins have shown resilience, the road ahead remains uncertain for Bitcoin as it attempts to break through the $65,000 barrier.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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