Leading cryptocurrencies pulled back Thursday as Federal Reserve Chair Jerome Powell’s remarks poured cold water on rate cut optimism.

What Happened: Bitcoin rose past $91,000 early morning hours, only to slip below $88,000 after the market close, resulting in more than a 2% decline over the last 24 hours.

Ethereum sharply descended from $3,240 to $3,040 over the day. Over the week, the second-largest cryptocurrency gained 3.89%, significantly trailing its senior partner, which was up over 15%.

More than $505 million worth of positions were liquidated in the last 24 hours, with nearly $350 million in upside bets getting wiped out.

Bitcoin’s Open Interest (OI) dropped 0.82% in the last 24 hours. A drop in OI, alongside a drop in spot price, also pointed toward long liquidations.

That said, the number of traders betting in favor of Bitcoin’s price rally rose in comparison to those shorting the asset, according to the Long/Short Ratio.

The “Extreme Greed” sentiment weakened from 88 to 80 as a result of the retrace, according to the Cryptocurrency Fear and Greed Index.

Top Gainers (24-Hours)

The global cryptocurrency market capitalization stood at $2.92 trillion, declining 1.53% in the last 24 hours.

Stocks closed in the red on Thursday. The Dow Jones Industrial Average slipped 207.33 points, or 0.47%, to close at 43,750.86. The S&P 500 lost 0.60% to end at 5,949.17. The tech-focused Nasdaq Composite dipped 0.64% to 19,107.65, marking its third straight losing day.

The sell-offs followed Fed Chair Powell’s statements that the central bank needn’t “be in a hurry” to cut rates given the strength of the economy. 

The cautious remarks triggered a sharp decline in rate cut expectations during next month’s FOMC meeting, from 82% to 59%,  according to data from the CME FedWatch tool 

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Analyst Notes: Popular cryptocurrency analyst Rekt Capital described Bitcoin dips early on in the price discovery phase as “high-probability opportunities.”

“As the parabolic phase goes on, however, the pullbacks will become increasingly riskier for dollar-cost-averaging Good thing we’re so early in the parabolic upside phase,” the analyst remarked.

On-chain analytics firm CryptoQuant said that high stablecoin inflows were driving the Bitcoin bull market.

“There is a continuation of a higher-than-normal influx of stablecoins. This suggests that barring any additional news flow, the Bitcoin bull market has not yet ended,” the firm said, indicating that more upsides could follow.

Photo by CMP_NZ on Shutterstock

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