- Bitcoin and Ethereum have experienced a rebound after a significant dip in their prices.
- The past 24 hours saw another $193 million worth of crypto futures contracts liquidated.
- The current cycle has been largely driven by interest in spot Bitcoin ETFs, with little new retail coming into crypto.
Bitcoin and Ethereum recover from a dip in prices, with the current cycle largely driven by interest in spot Bitcoin ETFs. The past day saw a significant amount of crypto futures contracts liquidated.
Bitcoin and Ethereum Experience Rebound
Bitcoin and Ethereum have rebounded after starting yesterday morning nearly 10% lower than they were on Tuesday. At the time of writing, the Bitcoin price is around $57,700 after having made a 0.5% recovery in the past 24 hours. Ethereum, after climbing 2.3% in the past day, is now trading for just below $3,000, according to CoinGecko data.
Significant Liquidation of Crypto Futures Contracts
However, the damage has still been done. Per CoinGlass, the past 24 hours saw another $193 million worth of crypto futures contracts liquidated, adding to the $300 million worth of liquidations seen earlier this week.
Current Cycle Driven by Bitcoin ETFs
Economist and trader Alex Krüger explained that this current cycle feels so different for traders because it’s largely been driven by interest in spot Bitcoin ETFs, which only just started trading in January this year. “There has been barely any new retail coming into crypto,” he wrote on Twitter. “It’s been mostly ETF buyers and previous cycle participants redeploying and going out the risk curve.”
Conclusion
Analysts mostly attributed crashing crypto prices to fear in the market over certainty among investors that the Federal Open Markets Committee would not lower rates. Then the Fed did exactly what the majority of investors thought it’d do by keeping interest rates unchanged, and crypto assets traded sideways. Even President Joe Biden has been optimistic that the Fed will still lower rates this year. “I do stand by my prediction that before the year is out, there’ll be a rate cut,” he said during a press conference in Japan last month.
