Major cryptocurrencies experienced a sharp decline overnight on Sunday as investors braced for upcoming inflation reports that could influence monetary policy decisions. Bitcoin dipped below $74,000 before recovering slightly, while Ethereum fluctuated in the high $2,000s. XRP and Dogecoin also saw significant drops. The market saw about $1 billion in liquidations over the last 24 hours, primarily affecting bullish long positions, according to Coinglass data.
Bitcoin’s open interest decreased by 0.75% over the same period, even as smart money sentiment turned “extremely bullish.” Despite this, the Crypto Fear & Greed Index indicated a prevailing “fear” sentiment among investors. The global cryptocurrency market capitalization stood at $2.559 trillion, down 2.80% over the last 24 hours.
Analyst Ali Martinez highlighted Bitcoin’s ability to hold the 200-day simple moving average near $73,000-$74,000, suggesting it could be the “last chance to buy the Bitcoin dip” before a potential rebound. Michaël van de Poppe identified $75,000 as a critical support level, warning that a breakdown could lead to a sharp decline with cascading liquidations in leveraged positions.
Meanwhile, stock futures traded mixed on Sunday evening, with the Dow Jones Industrial Average Futures up 0.36%, S&P 500 Futures adding 0.08%, and Nasdaq 100 Futures slipping 0.17%. This week, investors are focusing on Tuesday’s consumer price index report and Friday’s producer price index reports for clues on the Federal Reserve’s next move. The CME FedWatch tool showed a 78.5% probability of a rate increase at the Fed’s last meeting of the year.