Key Takeaways

Crypto markets shed $450 million in liquidations as BTC fell below $114K and ETH under $4,200. Losses spread into stocks, while traders awaited Powell’s Jackson Hole tone and FOMC minutes for near-term cues.

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The crypto market’s recent rally hit a roadblock this week, with major tokens sliding sharply into negative territory.

Overall market capitalization slipped 1.5% to $3.9 trillion, as Bitcoin [BTC] fell below the $114,000 mark with a 3.2% drop, and Ethereum [ETH] sank more than 5% under $4,200 as per CoinMarketCap.

Losses extended across altcoins as well, with Ripple [XRP], Cardano [ADA], and Solana [SOL] posting steep declines.

The downturn followed the release of the Federal Reserve’s July FOMC minutes on the 20th of August, which signaled a more cautious economic outlook.

Traders now await Fed Chair Jerome Powell’s Jackson Hole speech on the 22nd of August for further clues.

Liquidations mount as volatility surges

According to CoinGlass data, the market turbulence triggered heavy liquidations over the past 24 hours. 122,364 traders were liquidated, with losses nearing $450 million.

Binance’s BTCUSDT pair saw the largest single liquidation, amounting to $9.7 million, at press time.

Meanwhile, Ethereum traders were hit hardest, with total liquidations exceeding $180 million. Bitcoin followed with $102 million in liquidations.

This downturn also spilled over into crypto-related stocks, amplifying the broader market decline.

The pullback also extended into crypto-related stocks. Marathon Digital (MARA) slid 5.7%, Coinbase (COIN) fell 5.8%, and MicroStrategy (MSTR) tumbled 7.4% by the session’s close.

U.S traditional markets show resilience

In contrast to recent crypto volatility, U.S. equities remained relatively stable. The Dow Jones Industrial Average ended the session nearly flat, while the S&P 500 dipped 0.59% and the Nasdaq fell around 1.5%.

This pullback followed a strong July, during which spot Bitcoin ETFs experienced record inflows. However, momentum has slowed in August, with inflows tapering off and some products even registering net outflows.

ETH ETFs, which had attracted strong investor interest earlier in the month, have also begun to see withdrawals in recent days.

What’s ahead?

The Federal Reserve’s July meeting minutes dampened risk appetite and triggered the latest market sell-off.

Investors are now closely watching Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium on the 22nd of August, which could further influence sentiment.

Historically, Powell’s remarks have had a significant impact on markets. In 2022, his hawkish remarks led to a sharp 10% weekly drop in Bitcoin.

Currently, technical indicators suggest that bearish momentum remains dominant. However, some analysts believe this may be short-lived. Dom Harz, co-founder of Bitcoin DeFi protocol BOB, commented:

“This short-term correction is really just noise; a minor distraction from the fact that Bitcoin and, particularly Bitcoin DeFi, are undeniably rising.”

Yet, Spot Taker CVD data revealed that sellers were in control, signaling increased short-term downside risk.

Liquidation clusters suggest price pressure around $113,985 on the lower end and $117,523 on the upper end, indicating potential volatility in upcoming sessions.

With market sentiment teetering between optimism and caution, the next few days could determine whether crypto finds stability or faces another wave of liquidations.

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