Bitcoin, Ethereum, Dogecoin Retrace On Fears Of $240M Sale By US Government: King Crypto Should Reclaim $62K Soon To Avoid Another Pullback, Says Analyst

The cryptocurrency market edged lower Wednesday over fears of a potential sale of $240 million worth of Bitcoin by the U.S. government. 

What Happened: Bitcoin trended downward, slipping below $61,000, following the modest bounce to $62,000 in previous trading sessions. The pullback followed the transfer of about 3,940 Bitcoin, valued at $240 million, by wallets linked to the U.S. government to cryptocurrency exchange Coinbase.

The second-largest cryptocurrency, Ethereum, also retreated from the advances made on Tuesday.

About $93.78 million in futures positions was wiped out in the last 24 hours, while as many as 34,986 traders were liquidated. Almost an equal amount of bullish and bearish bets were liquidated.

The correction triggered a 1,34% decline in Bitcoin's Open Interest to $32.12 billion, typically interpreted as a bullish signal.

About 54% of the traders in the market were bullish on Bitcoin's prospects, while 29% were bearish. Nearly 17% of the market had a neutral sentiment.

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The global cryptocurrency market cap shrank 1.23% to $2.25 trillion in the last 24 hours.

Stocks recorded a second straight day of gains Wednesday. The Dow Jones Industrial Average gained 15.64 points, or 0.04%, to end at 39,127.80. The broader market index, S&P 500, closed 0.16% higher at 5,477.90. The tech-focused Nasdaq Composite ended the trading session up 0.49% at 17,805.16. 

Big Tech drove the rally, with Amazon.com Inc. AMZN  surging 3.9% and NVIDIA Corp. NVDA advancing 0.30% during the day.

Investors will closely watch the forthcoming high-stakes presidential debate between incumbent Joe Biden and challenger Donald Trump Thursday for signals that could affect the markets. 

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Analyst Notes: Popular cryptocurrency trader Justin Benett pointed out Bitcoin's struggles in reclaiming the falling wedge pattern, interpreted as a bullish signal by technical analysts.

"If Bitcoin can’t reclaim $62,000 in the next 24-48 hours, we’re probably looking at a “fill” of those imbalances at $55,000 and $53,000," Bennett cautioned.

On the other hand, widely-followed analyst Michaël van de Poppe forecasted a recovery for the altcoin market that has faced a lot of pain recently. Reason? Listing of spot Ethereum ETFs. 

"We’ve seen a significant crash across the board, but that should be over with the Ethereum ETF coming in," the analyst remarked

Photo by Igor Faun on Shutterstock

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