What's Going On With Crypto Markets? Board Bleeds Red, 2023 Rally Witnesses Drop

With two weeks remaining for 2023 to end, the crypto markets seem to be trading under pressure ahead of the Federal Open Market Committee’s (FOMC) final meeting and decision on interest rates.

What Happened: Based on CoinGlass data, in the past 24 hours total liquidations came in at $427.53 million, the highest since mid-September. Open interest for Bitcoin is currently standing at $18.27 billion compared to $18.51 billion reported as of Dec. 10, 2023.

CCN reported that in the initial 13 minutes of trade, on Dec.11 morning, the crypto markets wiped away $83 billion of their collective value.

In the past 24 hours of trading, the global crypto market cap witnessed a drop of 6.4% to $1.53 trillion wherein Bitcoin's BTC/USD dominance is currently standing at 52.0%.

Most of the cryptocurrencies across the board have been trading relatively sideways or in the red in the past 24 hours, except for USDC USDC/USD and Avalanche AVAX/USD, which are the only two in the green of the top 20 cryptocurrencies.

Crypto Investor, The Wolf Of All Streets, took to X on Dec. 10 to highlight the crypto market’s correction was after the apex crypto king, Bitcoin, witnessed its eighth consecutive upward weekly candle. It implied a profit-taking pressure on investors which comes on the heels of Bitcoin’s significant recent rally, though the crypto has seen its trajectory change on Monday.

Why Does It Matter:  The crypto market is awaiting the final FOMC meeting of 2023 scheduled for Dec.12-Dec.13 and the next round of inflation data. Most of the analysts are forecasting an improvement in core inflation and assuming that the Fed will hold rates at the current level of 5.25% to 5.5%.

If this happens, it will be the third time that the Fed will maintain its rates unchanged. In the last FOMC meeting on Oct. 31-Nov. 1, when rates remained unchanged, Bitcoin prices saw an increase of around 1.7%.

Ahead of the data, Bloomberg reported citing Tony Sycamore, a market analyst at IG Australia Pty Ltd., “It makes sense to see some profit taking. He expects falls toward the $37,500 to $40,000 range to be “well-supported” by dip buyers.”

James Butterfill, head of research at asset management firm CoinShares, said, “There's quite a few different factors that are likely to fall in line for 2024. What popped the Bitcoin bubble was rising interest rates, and what will probably help spur the next rally ... will be interest rates being cut,” as reported by Reuters. Bitcoin prices in 2021 peaked at $69,000 amid record-low interest rates. 

Price Action: From peaking to record high levels of $45,000, Bitcoin is currently changing hands at $40,978, down 6.6% in the past 24 hours. Ethereum ETH/USD and XRP XRP/USD have followed suit with similar losses of 7% and 7.6%, respectively.

What's Next: What traders want to watch is if the Bitcoin halving event and an imminent spot Bitcoin ETF approval lead a price rally into 2024 or if there will be a price correction immediately after the spot ETF approval.

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