Bitcoin, ETH, XRP, DOGE, and SHIB prices decline amid cryptocurrency market sell-off

• The cryptocurrency market cap fell 3% to $3.52 trillion with a 25% decline in trading volumes.
• There were $250 million worth of cryptocurrency liquidations, of which $153 million occurred in 12 hours.
• Bitcoin fell 3% to $102,467, and Ethereum fell 3% to $3,220.

the Crypto market There was a sharp sell-off as global market sentiment deteriorated. The market value of cryptocurrencies fell by more than 3% to $3.52 trillion, while trading volumes fell by 25% in the past 24 hours. Leading cryptocurrencies such as Bitcoin, Ethereum, and major altcoins have seen significant price declines, with bearish trends taking over the market.

Market sentiment and liquidations lead to sell-offs in the cryptocurrency market

Market volatility rose as liquidations increased, exacerbating the crypto sell-off. Data from Coinglass showed $250 million worth of cryptocurrency liquidations in the past day, with $153 million occurring within 12 hours. Bitcoin and Ethereum led the declines, with Bitcoin falling more than 3% to $102,467 and Ethereum falling 3% to $3,220.

This decline came amid surrounding optimism Donald TrumpHis inauguration faded. Although potential cryptocurrency-friendly policies or bitcoin-related announcements were expected, none of them materialized during Trump’s speech. Adding to the pressure, the US Securities and Exchange Commission has formed a new task force on cryptocurrencies, indicating tighter regulatory oversight in the future.

The Bank of Japan’s decision to raise interest rates

The Bank of Japan’s upcoming decision to raise interest rates has significantly impacted market sentiment. Analysts expect a 25 basis point hike to 0.5%, the highest level in 18 years. This potential move threatens global liquidity and risk assets, as cryptocurrencies like Bitcoin have historically reacted negatively to such events.

The possibility of unwinding the yen carry trade has worried investors. Similar scenarios last year led to a sudden drop in Bitcoin prices during interest rate hikes by the Bank of Japan. This looming decision has raised fears of further sell-off in the cryptocurrency market in the coming days.

Interest rate decision of the US Federal Reserve

the Federal ReserveThe upcoming policy meeting has added another layer of uncertainty to the market. Current forecasts indicate that there is a 99.5% chance that interest rates will remain at 4.25%-4.50%. However, rising Treasury yields and a stronger US Dollar Index have created additional headwinds for cryptocurrencies.

Bitcoin’s price traditionally moves inversely with the dollar index and Treasury yields, making these factors crucial. With the dollar rising toward 109 and yields hovering near 4.6%, traders are bracing for more volatility. Federal Reserve Chair Jerome Powell’s comments are likely to shape near-term market dynamics.

Bitcoin and Ethereum options expiration

Upcoming options expirations have increased market volatility, with important contracts expiring this week. Derribit data revealed that 29,000 Bitcoin options worth $3 billion will expire, with a call ratio of 0.48. Meanwhile, 169,000 Ethereum options worth around $500 million are about to expire, with a maximum pain point higher than current prices.

These expiry periods often result in erratic price fluctuations as traders adjust their positions. Bearish market sentiment and low trading volumes suggest that cryptocurrencies may face additional downward pressure. Traders watch these developments closely to gauge the next market movement.