- Over $238 million has been liquidated from the Cryptocurrency market in the 24 hours after a sharp price decline.
- The upcoming US election next week and the upcoming FOMC meeting could cause significant volatility in the market.
The Cryptocurrency market is heading towards one of the most important weeks of the year. Speculation surrounding the events of the week has led to a price decline. At the time of reporting, all 50 top Cryptocurrencies by market capitalization, except Celestia [TIA], were trading in the red.
Last weekend, Bitcoin [BTC] dropped from $71K to trade at $68,380 currently. Ethereum [ETH] is also trading at $2,440, after a 2% decline.
The price decline has led to massive liquidations in the derivatives market. Data from Coinglass shows that over $238 million has been liquidated from the market in the past 24 hours.
The liquidations have affected over 104K traders, with the largest liquidation order worth $9.9 million occurring on the OKX exchange.
Aside from the usual weekend volatility, the US election poll on Polymarket may have also stirred the recent price movements. The election is just under two days away, and former US President Donald Trump has dropped 6% in the polls over the past three days.
A Trump victory is expected to have a net positive impact on the Cryptocurrency market due to his pro-Cryptocurrency campaign policies.
Upcoming FOMC Meeting
The Federal Open Market Committee (FOMC) will hold its next meeting on November 7th. In the previous meeting, the committee had further cut interest rates by 50 basis points, providing a boost for risk assets like Cryptocurrencies.
Data from the CME FedWatch Tool shows that 98% of investors expect an additional 25 basis point rate cut in the November meeting.
If the Federal Reserve adjusts interest rates as per market expectations, Cryptocurrency prices are likely to trend upwards. This is because the loose monetary policy increases investor risk appetite, thereby driving demand for assets like Cryptocurrencies.
As TinTucBitcoin reported, the US inflation rate for September was 2.1%, close to the Federal Reserve's 2% target. This supports the argument for further interest rate cuts.
After the September meeting, Bitcoin had risen around 8% in just one week. A similar upward move could push BTC to a new ATH, as it is currently not far from its all-time high, just 7% away.
Crypto Market Sentiment Remains Bullish
Despite the recent price decline and increased volatility, the Cryptocurrency market sentiment remains positive, as evidenced by the Fear and Greed Index, which currently stands at 74.
At the current value, this index indicates that the market is in a state of greed. This sentiment typically drives buying activity, leading to price increases.
This suggests that Cryptocurrency traders are still looking towards future gains after the recent dip. Some positive factors in this sentiment include the FOMC meeting and the expectation that Q4 historically has brought price explosions for Cryptocurrencies.
