Leading cryptocurrencies corrected Monday after the U.S. government moved nearly $2 billion in Bitcoin to new addresses.

What Happened: The world’s largest cryptocurrency dipped to an intraday low of $94,600 after on-chain data showed the outward movement of around 19,800 BTCs, worth $1.92 billion, confiscated from the online black market Silk Road, from the address linked to the U.S. government.

Analytics firm Arkham said that the stash was split into two wallets, from where about 10,000 BTCs, or $963 million, were moved to cryptocurrency exchange Coinbase.

The resultant FUD gripped the larger market, pushing Ethereum to fall below $3,600 until dip buying sparked a comeback.

The correction triggered nearly $600 million in liquidations in the last 24 hours, with about $425 million in bullish bets getting wiped out.

Bitcoin’s Open Interest (OI) dropped by 1.41% in the 24-hour period, while the Long/Shorts Ratio fell further, signaling the dominance of bearish positions in the derivatives market.

Owing to the FUD, the “Extreme Greed” sentiment fell marginally from 80 to 76 in the last 24 hours, per the Cryptocurrency Fear & Greed Index.

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The global cryptocurrency market capitalization stood at $3.47 trillion, following a slight decrease of 0.31% in the last 24 hours.

Stocks spiked to record highs to kickstart 2024’s last trading month. The S&P 500 closed 0.24% higher at 6,047.15, while the tech-heavy Nasdaq Composite surged 0.97%, ending at 19,403.95.

Investors parsed encouraging macroeconomic data Monday, as the Manufacturing Purchasing Managers’ Index (PMI) rose from October’s 46.5% to 48.4% in November, beating analyst expectations of 47.5%. This marked the slowest contraction in the manufacturing sector since June.

This next focus will be on the crucial monthly jobs report for November, slated for Friday.

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Analyst Notes: A widely followed cryptocurrency analyst, going by the pseudonym Wolf, projected a sharp correlation for Bitcoin after it broke the $100,000 milestone.

“A breakout above $100,000 would trigger retail FOMO, only to be followed by a 20-25% correction. This kind of structure is something we’ve seen just a few months ago and is typical in crypto markets,” the analyst emphasized.

Cryptocurrency analyst and trader Ali Martinez noted a decline in on-chain activity for the Bitcoin network, with daily active addresses, transaction volume, and whale activity cooling down over the past week.

“We need a spike in these metrics to confirm a continuation of the uptrend,” Ali stated.

Photo by CMP_NZ on Shutterstock

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