Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) led the cryptocurrency market to huge losses in the past 24 hours after a profitable February. According to data provided by Coingecko and Binance-backed Coinmarketcap, the total global cryptocurrency market capitalization fell by about 7.7 percent to about $2.5 trillion during the early trading session in London on Tuesday.
In the wake of increased volatility in cryptocurrencies, more than $526 million, with over $442 million from long traders, were liquidated in the past 24 hours.
On the daily chart of Bitcoin derivatives in USD, the instrument is already indicating short-term weaknesses after falling below the support range between $64,500 and $65,266 over the past 24 hours. As a result, the next few weeks are likely to be volatile for Bitcoin and the entire cryptocurrency market.
The most important reasons behind the decline in the cryptocurrency market today
Risk before the Federal Open Market Committee
On Wednesday, the US Federal Reserve will release its anticipated benchmark interest rates after the past two Consumer Price Index (CPI) data showed unstable inflation. Economists expect that the Fed will hold the interest rate at 5.50 percent but will not retreat.
However, many uncertainties loom as Fed commissioners lack confidence in raising interest rates. As a result, cryptocurrency traders have de-risked their traders to avoid forced liquidation.
Healthy market before the halving
After Bitcoin and the cryptocurrency market recorded clear gains in the past few months supported by the approval of spot Bitcoin exchange-traded funds (ETFs) in the US, the cooling-off period was expected to ensure a healthy market correction.
According to popular cryptocurrency analyst Ali Martinez, Bitcoin price is likely to find a strong support level around $61,100 in the coming weeks. In case of a sustained sell-off, the cryptocurrency analyst believes the support range between $51,530 and $56,685 will hold.
De-risking altcoins and memecoins
The altcoin market and meme industry has posted significant gains recently. The remarkable rise in new meme coins meant inevitable profit-taking, which led to an escalation in the crypto sell-off.
