Leading cryptocurrencies slid Wednesday as investors were alarmed by the transfer of half a billion dollars worth of seized Bitcoin out of U.S. government wallets.

What Happened: Bitcoin rallied to $61,670 during the morning hours on cooler-than-expected July consumer price index (CPI) data, but quickly pulled back and trended down after the U.S. government moved as many as 10,000 Bitcoins, worth $593 million, recovered from the Silk Road incident.

The top cryptocurrency rose 5.45% this week, but it has failed to fully recover losses from the contraction triggered over recession fears earlier this month.

Ethereum witnessed a similar trajectory, sailing to $2,770 morning before retracing to the high $2,600 region.

The total cryptocurrency liquidation hit $121 million in the past 24 hours, with long liquidations accounting for 73% of the total.

Bitcoin’s Open Interest dipped marginally by 0.06%, while the number of traders going long on the leading currency rose in the last 24 hours.

The market continued to be in a state of “Fear,” according to the Cryptocurrency Fear & Greed Index, indicating significant selling pressure.

Top Gainers (24-Hours)

The global cryptocurrency market stood at $2.09 trillion, shrinking 1.90% in the last 24 hours.

Stocks inched higher Thursday on favorable inflation data. The Dow Jones Industrial Average rose 242.75 points, or 0.61%, to end at 40,008.39. The broad-based index S&P 500 gained 0.38% to close at 5,455.21. The tech-heavy Nasdaq Composite added 0.03% to end at 17,192.60.

The CPI saw a cooler-than-anticipated annual headline print in July, boosting investors’ hopes of larger interest rate cuts by the Federal Reserve.

According to the CME FedWatch tool, there was a 62% probability of the Fed lowering rates to the 5.25-5.5% range. 

See More: Best Cryptocurrency Scanners

Analyst Notes: Well-known cryptocurrency analyst Rekt Capital pointed out how $61,700 was providing stiff resistance to Bitcoin bulls.

The analyst also highlighted how King Crypto was oscillating between late June wedge highs of $62,000 and the early July wedge highs of $58,280.

Widely-followed trader Michaël van de Poppe observed that the possibility of a rate cut by the Fed was “approaching,” and predicted that it would lead to upward price action for Bitcoin as well.

Image via Shuttersstock

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