More than 800 million dollars as Bitcoin and Ethereum Crash liquid

During the early trading session in Asia, the crypto market experienced a sharp decline. According to CoinGecko, the total crypto market capitalization decreased by 12.5%, now standing at around $1.97 trillion.

This is the first time since mid-February that the market cap has fallen below $2 trillion.

The Fed's rate stance spurs speculation of emergency cuts among market jitters

Bitcoin, the largest by market capitalization, fell below $60,000, now trading at $53,399. This figure represents a 10.8% drop in the last 24 hours.

Similarly, Ethereum, the second largest cryptocurrency, witnessed a significant decrease of 21.2% in the same period. It is currently trading at $2,306, down from $2,240.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Ethereum's sharp decline has had a significant impact on the ecosystem. According to on-chain data, when the price of Ethereum was close to $2,100, the highest gas payment reached 710 Gwaii, while the current average is 350 Gwaii. Crypto journalist Colin Wu said that if the price of Ethereum falls further, it could lead to more liquidity in DeFi protocols.

“When Ethereum falls to $1,950, $92.2 million of crypto assets will be released in the DeFi protocol; $1,790, $271 million of DeFi assets will be released,” Wu said.

The broader impact of today's drop will also be seen in liquidity numbers. According to Coinglass, over the past 24 hours, liquidity was over $800 million, with $699.45 million from long positions and $100.56 million from short positions. The largest single liquidation occurred on Huobi with the BTC-USD pair at $27 million.

The fear and greed index for the crypto market has dropped to 26, indicating a “fearful” state. This measure reflects the general market sentiment, which tends to increase over time.

Many industry experts attribute the recent slowdown to recent macroeconomic developments. The Bank of Japan's unexpectedly hawkish stance last week, coupled with the US Federal Reserve's cautious rate-cutting approach, has fueled market uncertainty.

Despite market expectations, the Fed's reluctance to cut rates in September pushed safe-haven investments sharply higher due to weak US economic data. The signal reinforced concerns that the Fed may be lagging in adjusting rates, which would require aggressive monetary policy to prevent a recession.

Read more: How to protect yourself from inflation using cryptocurrency

However, many crypto traders believe that the current situation may prompt the Fed to cut the emergency rate in 2024. The odds of an emergency Fed rate cut have increased by 11% in the past 24 hours, according to data from Polymarket Forecast Market.