- The optimism for an “Uptober” in the crypto markets was short-lived as both crypto and equity markets experienced a decline at the week’s outset.
- After a modest recovery phase spanning seven days, the cryptocurrency market capitalization has diminished by 5% since the middle of September, currently resting below the $2 trillion mark at $1.982 trillion.
- “The start of the FOMC meeting is pivotal,” remarked a market analyst, “and the anticipation of volatility has led many to monetize their holdings ahead of the event.”
Traders anticipate market volatility ahead, causing a shift in the crypto market as profit-booking and liquidations increase.
FOMC Meeting Drives Market Sentiment
This week’s focus is heavily on the Federal Open Market Committee (FOMC) meeting scheduled for September 18-19. The expectancy of market turbulence has prompted short-term traders to secure their profits, resulting in weakened market positions over the weekend. This proactive approach by traders indicates their strategy to manage exposure to potential market fluctuations instigated by the FOMC announcements.
Exchange Spot Netflows Reveal Selling Pressure
CoinGlass data reveals that the 24-hour exchange spot netflows for major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are negative. This implies a higher volume of assets leaving the exchanges than entering, highlighting a predominant selling sentiment in the market. Such patterns are usually indicative of traders exiting their positions to lock in gains or minimize losses before anticipated volatility.
Historic Daily Liquidations
Recent market activity saw liquidation totaling over $186 million across major cryptocurrencies, marking one of the largest events in recent times. Bitcoin alone failed to sustain a price above $60,000, leading to a significant liquidation wave affecting more than 65,000 traders. Of the total liquidations, Ethereum and Bitcoin positions were notably impacted, with liquidated values of $55 million and $35 million, respectively. These liquidations have further amplified the selling pressure, instigating a broader market correction as the week commenced.
Analyzing Market Cap Trends and Resistance
Despite a 12% rally in total crypto market capitalization during the second week of September, the momentum was insufficient to break the long-standing downtrend. The total market cap remained under the $2.1 trillion resistance level, consistent with behavior observed in previous quarters. The persistence of a lower-high structure underscores the market’s vulnerability. Key technical indicators, such as the 200-day EMA and Fibonacci retracement levels, further validate the continuation of this bearish trend, with the total market cap hitting resistance even at minor rebounds.
Conclusion
This week has highlighted the significant interplay between macroeconomic events and market sentiment within the crypto sphere. The anticipatory actions of traders ahead of the FOMC meeting, coupled with widespread liquidations, accentuate the current cautious market climate. As the crypto market continues to navigate a period of high volatility and resistance barriers, traders and investors should remain vigilant and well-informed, conducting thorough research before making investment decisions. The ongoing developments will likely set the tone for the crypto market in the weeks to come.
