Cryptocurrencies
tumbled
deeper
into
correction
on
Tuesday
with
bitcoin
(BTC)
dipping
to
near
$66,000
as
traders
brace
for
Wednesday’s
key
U.S.
inflation
report
and
Federal
Reserve
meeting.
Bitcoin
(BTC)
started
the
day
trading
near
$70,000
before
hitting
a
three-week
low
price
at
$66,170
during
the
U.S.
session.
It
slightly
rebounded
to
near
$66,500,
but
was
still
down
nearly
5%
over
the
past
24
hours.
Altcoins
saw
even
deeper
pullbacks
during
the
same
period,
with
the
broad-market
crypto
market
benchmark
CoinDesk
20
Index
declining
over
6%
with
all
twenty
constituents
being
in
the
red.
Ethereum’s
ether
(ETH)
broke
below
$3,500
and
was
down
6.5%,
while
solana
(SOL),
dogecoin
(DOGE),
Cardano’s
ADA
and
Chainlink’s
LINK
endured
6%-9%
losses.
The
sudden
pullback
incurred
over
$250
million
in
liquidations
of
leveraged
derivatives
trading
positions
across
all
crypto
assets,
CoinGlass
data
shows,
marking
the
second
significant
leverage
flush
in
a
week
after
Friday’s
$400
million
liquidations.
Liquidations
occur
when
an
exchange
closes
a
leveraged
position
due
to
a
partial
or
total
loss
of
the
trader’s
initial
money
down,
or
“margin,”
because
the
user
fails
to
meet
the
margin
requirements
or
doesn’t
have
enough
funds
to
keep
the
position
open.
One
reason
behind
the
pullback
is
investors
“de-risking”
from
crypto
assets
ahead
of
tomorrow’s
May
Consumer
Price
Index
(CPI)
report
and
Fed
meeting,
hedge
fund
QCP
said
in
an
update.
Bitcoin
could
see
a
volatile
session
Wednesday
as
it
has
been
“highly
responsive”
to
economic
data
recently
and
its
30-day
correlation
with
U.S.
equities
climbing
to
highest
since
2022,
K33
Research
noted
in
a
Tuesday
market
update.
“The
stage
is
set
for
a
frantic
macro-Wednesday,
with
both
May
CPI
data
and
the
FEDs
interest
rate
decision
poised
to
move
the
market,”
K33
analysts
said.
Investors
will
monitor
the
Federal
Open
Market
Committee
(FOMC)
members’
interest
rate
outlook
–
so-called
“dot
plot”
–
to
see
how
many
rate
cuts
policymakers
are
projecting
for
this
year
in
light
of
recent
sticky
inflation
readings
and
softer
economic
data.
“The
FOMC
dot
plot,
alongside
forward
guidance
during
Jerome
Powell’s
press
conference,
is
likely
to
be
the
most
material
price
movers,
as
BTC
has
resumed
its
attentiveness
to
the
market’s
interest
rate
expectations.”
Market
observers
noted
some
positive
signs
during
the
sell-off
that
could
point
to
a
quick
recovery.
Bitcoin
saw
multiple
pullbacks
this
year
before
FOMC
meetings
only
to
reverse
the
move
soon
after,
pseudonymous
crypto
analyst
Gumshoe
pointed
out
in
an
X
post.
Bitcoin
futures
open
interest
on
crypto
exchanges
BitMEX
and
Binance
deviated
earlier
today,
crypto
analytics
platform
CryptoQuant
posted
citing
pseudonymous
trader
BQYoutube.
“Often
this
kind
of
phenomenon
is
seen
when
whales
[on]
BitMEX
start
to
accumulate
positions
while
Binance
retail
gets
washed
out,”
the
post
added.
“Despite
short-term
headwinds,
we
think
this
might
be
a
good
opportunity
to
accumulate
coin,”
QCP
said.