Key Points
- The cryptocurrency market experienced a massive $238 million liquidation following a significant price drop.
- Upcoming events like the US elections and the FOMC meeting could cause increased market volatility.
The cryptocurrency market is bracing itself for a pivotal week. The anticipation of upcoming events has already triggered a decrease in prices. As of now, all top 50 cryptocurrencies, with the exception of Celestia [TIA], are experiencing a downturn.
Over the past weekend, Bitcoin [BTC] fell from $71,000 to $68,380. Similarly, Ethereum [ETH] is currently trading at $2,440, marking a 2% dip.
Massive Market Liquidation
The falling prices triggered substantial liquidations in the derivatives market. According to data from Coinglass, over $238 million was liquidated from the market within 24 hours. This affected over 104,000 traders, with the largest liquidation order of $9.9 million occurring on the OKX exchange.
The US election polls on Polymarket may have contributed to the recent price fluctuations. With the election less than two days away, former US President Donald Trump’s poll numbers have dropped by 6% in just three days. A Trump victory is predicted to positively impact the crypto market due to his pro-crypto campaign policy.
Anticipated FOMC Meeting
The Federal Open Market Committee (FOMC) is scheduled to meet on November 7th. The previous meeting saw a 50 basis point reduction in interest rates, paving the way for a recovery in risk assets like crypto. Data from the CME FedWatch Tool indicates that 98% of investors expect another rate cut, this time of 25 basis points, at the November meeting.
If the Federal Reserve reduces rates as per market expectations, this could trigger a surge in crypto prices. A relaxed monetary policy typically encourages investors to take on more risk, thereby increasing demand for assets like crypto.
Despite the recent price drop and increasing volatility, the overall sentiment in the crypto market remains positive. The Fear and Greed Index, which currently stands at 74, indicates a state of market greed. This sentiment often drives buying activity, leading to price increases.
Crypto traders appear to be optimistic about potential gains, despite the recent market pullback. Positive catalysts for this sentiment include the upcoming FOMC meeting and the historical trend of Q4 being favorable for crypto prices.
