Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) led the crypto market with heavy losses in the past 24 hours after posting gains in February. Global crypto market capitalization fell by about 7.7% to about $2.5 trillion as of the start of trading in London on Tuesday, according to data provided through Coingecko and Binance-backed Coinmarketcap.
In response to increased volatility in cryptocurrencies, long traders have liquidated over $526 million, of which over $442 million, in the past 24 hours.
On the Bitcoin USD Derivatives daily chart, the commodity is already showing short-term weakness after breaking below the support range between $64,500 and $65,266 in the past 24 hours. As a result, the coming weeks are likely to be volatile for Bitcoin and the crypto market as a whole.
The main reasons why the cryptocurrency market is falling today
Risk-off before FOMC
The Federal Reserve will announce its long-awaited benchmark interest rate on Wednesday after the last two rounds of consumer price index (CPI) data showed that inflation is not easing. Economists expect the Fed to keep interest rates unchanged at 5.50% but not lower them.
Nevertheless, much uncertainty looms as Fed members lack confidence in raising rates. As a result, crypto traders are mitigating trader risk to avoid forced liquidations.
Healthy market before halving
Buoyed by the approval of a spot Bitcoin exchange-traded fund (ETF) in the US, the move is aimed at ensuring a healthy correction in the market after the Bitcoin and crypto markets have recorded clear gains over the past few months. A cooling off period was expected.
According to renowned cryptocurrency analyst Ali Martinez, Bitcoin price is likely to reach a solid support level near $61,100 in the coming weeks. If the decline continues, cryptocurrency analysts believe that the $51,530 to $56,685 support range will hold.
Risk avoidance of altcoins and meme coins
The altcoin market and memecoin industry have recently recorded significant gains. The remarkable rise in new meme coins meant inevitable profit-taking, which escalated the cryptocurrency’s decline.
