Leading cryptocurrencies slumped Thursday as the Federal Reserve’s hawkish rate cut projection continued to fuel anxiety among investors.

What Happened: World’s largest digital currency, Bitcoin, slipped to the $66,000 zone, with a $16% decline in 24-hour trading volumes. Ethereum dipped below $3,500 for the first time in three weeks.

The slump liquidated $162 million of cryptocurrency investors’ fortunes in the last 24 hours, with long liquidations amounting to $139 million. 

Bitcoin’s Open Interest plunged 2.16% in the last 24 hours. A drop in OI and a drop in spot price indicated that money flew out of the derivatives market.

The number of traders holding long positions for Bitcoin narrowly increased past those betting on the asset’s price decline, suggesting expectations of an imminent rebound.

The cryptocurrency fear and greed index flashed “Greed,” suggesting optimism in the market, and the potential of an increase in buying pressure.

Top Gainer (24 Hour)

The global cryptocurrency market cap stands at $2.42 trillion, shrinking by 2.63% in the last 24 hours.

Stocks closed higher on Thursday. The broader market index, S&P 500, gained 12.71 points, or 0.23%, to close at 5,433.74. The tech-heavy Nasdaq 100 added 0.34% to finish at 17,667.56. Both these indices posted their fourth straight record close. Defying the trend, the Dow Jones Industrial Average fell 0.17% to end at 38,647.10. 

The rally follows cooler-than-expected producer price index data for May, a second straight day of easing inflation outlook after the consumer price index came lower-than-expected Wednesday.

Alongside, the weekly jobless claims rose more than anticipated, reaching their highest level since August 2023. 

This comes a day after the Federal Reserve kept interest rates steady, although trimmed its rate cut expectations for the year to one from the previous estimate of three.

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Analyst Notes: While Bitcoin’s struggle to breakout from the $60,000-$71,000 range may bother some participants, popular cryptocurrency analyst Rekt Capital saw it as “beneficial.”

“This continued consolidation is enabling the price to resynchronize with historical Halving cycles so that we can get a normal, usual Bull Run,” the analyst stated.

A bearish projection by technical analyst The Long Investor hinted at the possibility of the King Crypto dropping to lows of $51,000.

“Price is testing the 50-Day MA now, losing this level and the price action will continue moving within this bull flag,” the widely-followed X user remarked.

Photo by Avi Rozen on Shutterstock

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