After $1 billion liquidations on crypto’s ‘Black Monday,’ selling wanes ahead of FOMC
Cryptocurrency sell-offs continued through Tuesday morning, with drawdowns waning after the sector’s “Black Monday” saw over $1 billion in crypto derivatives liquidated over a 24 hour period according to data from Coinglass.
Overall, the total crypto market cap has lost more than two-thirds of its value since peaking in November, according to Coinmarketcap, falling from $3 trillion at its apex to $952 billion as of Tuesday 11 am New York time.
After briefly dipping to $20,950 per unit early Tuesday morning, the bitcoin (BTC-USD) price has settled at $22,652, a loss of 5.2% in the last 24 hours according to Coinmarketcap.
Meanwhile, ether (ETH-USD) trades at $1,236 per coin, a 1.31% gain on the day after seeing some of the worst losses of major cryptocurrencies Sunday through Monday.
According to DeFi Llama, the total market capitalization of stablecoins is currently $158 billion, down 16.4% from its May 1 peak of $189 billion, a 1% loss on the day.
Analysts remain extremely cautious as investors await the Federal Reserve’s Wednesday FOMC meeting and press conference.
“If Wall Street gets a very hawkish decision and press conference, Treasury yields and the dollar could surge once again and that would test the line in the sand many crypto traders have drawn,” noted Edward Moya, senior market analyst at Oanda.
“If Bitcoin breaks below the $20,000 level, support might not emerge until the $17,000 level. Another crypto plunge might not see major support until the 2019 summer high around the $14,000 level,” Moya went on to say.
Also drawing headlines on Tuesday was an announcement from Coinbase (COIN) that the company would be laying off 1,100 employees, or 18% of its workforce, in a bid to remain financially sound.
“We appear to be entering a recession after a 10+ year economic boom,” Coinbase founder and CEO Brian Armstrong said this morning in a blog post. “A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly.”
The major crypto exchange is the latest of crypto firms announcing layoffs including competitor exchanges Gemini and Crypto.com as well as the lender BlockFi, which have all named “crypto winter” as the primary reason for the cuts.
In addition to the Fed announcement, traders are also waiting for more clarity on issues related to Celsius Network’s solvency, Noelle Acheson, head of insights with Genesis Trading told Yahoo Finance.
Since pausing withdrawals Sunday evening, the crypto lender has “become a forced seller of other assets” according to Acheson.
“The market is still digesting what this could mean,” she said, adding that even if the firm reopens withdrawals, Celsius could see a wave of redemptions that could trigger further selling.
Here’s a roundup of other crypto movers.
Major cryptocurrencies such as Solana (SOL-USD), up about 6%, Cardano’s ADA token (ADA-USD), up around 4%, Chainlink (LINK-USD), up 15%, Polkadot’s DOT token (DOT-USD), up 5%, and Avalanche’s AVAX token (AVAX-USD), up 1%, have all seen gains on the day.
Like bitcoin, sell offs continue for Binance’s BNB token (BNB-USD) down 1%, Tron (TRX-USD), down 9%, and Polygon’s MATIC token (MATIC-USD), down over 3%.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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