Leading cryptocurrencies plunged alongside stocks on Thursday, as strong economic data dampened expectations for a rate cut by the Federal Reserve.
Bitcoin dived below $109,000, worsening the downturn. The apex cryptocurrency’s trading volume jumped 55% in the last 24 hours, signaling high selling pressure.
Ethereum sank below $4,000 for the first time in six weeks, with volumes doubling in the 24-hour period.
Nearly $1.20 billion was liquidated from the cryptocurrency market in the last 24 hours, with long liquidations accounting for $1.08 billion
Bitcoin’s open interest fell 2.59% in the last 24 hours, but the number of Binance traders betting on the asset’s price rise rose dramatically, according to the Long/Short ratio.
The "Fear" sentiment intensified in the cryptocurrency market, according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $3.76 trillion, contracting by 3.48% in the last 24 hours.
Stocks extended their losses on Wednesday. The Dow Jones Industrial Average fell 173.96 points, or 0.38%, to end at 45,947.32. The S&P 500 dipped 0.50% to finish at 6,604.72, while the tech-focused Nasdaq Composite closed down 0.50% at 22,384.70.
Stronger-than-expected economic data lowered expectations for Fed rate cuts and lifted bond yields.
The U.S. economy grew at an annualized 3.8% in the second quarter, up from a prior 3.3% estimate, while initial jobless claims fell by 14,000 to 218,000 in the week ending Sept. 21.
The benchmark 10-year treasury yield hit 4.2%. Meanwhile, the probability of a further 0.25% rate cut at the October meeting dropped sharply from 92% to 85.5%, according to the CME FedWatch tool.
Widely followed cryptocurrency analyst and trader Michaël van de Poppe expected Bitcoin to sink lower to $107,000 before rebounding.
"However, 90% of the correction is over. Good times are ahead," the analyst voiced optimism.
ZYN, another analyst on X, said Ethereum's dump to $3,800 is "highly likely to happen."
"After that, I’m expecting a bottom and reversal in the coming weeks," they predicted.
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