The general crypto market experienced a steep decline after recent economic data showed that a Fed rate increase was imminent. On Jan. 8, the overall crypto market capitalization declined 6.3% and settled around $3.33 trillion as of this writing.
Heavy Losses in the Crypto Market
According to CoinGecko data, Bitcoin’s (BTC) price dropped by 3.6% in the last 24 hours to trade at $94,913. The leading cryptocurrency has been unable to flip the $100,000 price to support since trading above this price recently.
Similarly, Ethereum’s (ETH) price declined by 5% within the same timeframe to trade at $3,347. Other top altcoins also recorded notable losses.
Cardano (14%), Dogecoin (10%), and Solana (8%) completed the list of the top 10 altcoins with almost double-figure price drops. XRP and Binance Coin also recorded losses of 4% and 3.9%, respectively.
Meanwhile, CoinGlass data showed that liquidations for long positions in the crypto market reached $505.93 million. The largest liquidation on a single pair was the $17.74 loss on ETH/USDT on the Binance exchange.
Like the crypto market, the US stock market is also experiencing a downturn. A report from the latest Kobeissi Letter noted that investors withdrew over $625 billion from the stock market in the past day.
The S&P 500 lost 1.1% on Jan. 7 to close at 5,509.03, while The Nasdaq composite fell 375 points and the Dow Jones dropped 0.61% to 42,528.36.
US Economic Data and Market Fears
Recent data from the CME’s FedWatch tool shows a 95% probability that the Fed will not reduce interest rates after its Jan. 29 meeting. The market expectation for a rate cut for March and May has fallen to 37% and 42%, respectively.
The crypto market’s technical indicators indicate further bearishness. There is a bearish divergence between the crypto market price and the relative strength index (RSI).
This divergence suggests that traders are taking profits at lower highs, contributing to the current downward pressure and pushing the total market cap toward the $3.18 trillion mark.