WASHINGTON (dpa-AFX) - Cryptocurrencies plunged in the past 24 hours as ebbing rate cut expectations from the Federal Reserve and hawkish comments from Fed officials dampened market sentiment towards digital assets.
Overall crypto market capitalization has tumbled more than 6 percent in the past 24 hours. Bitcoin touched a 24-hour low of $96,071.89 whereas Ethereum dropped to a low of $3,112.43 in the past 24 hours.
Expectations that data to be released would reveal a resilient U.S. economy which would allow the Fed to not immediately worry about economic growth diminished rate cut hopes. The Fed's concerns about inflation and expectations of improvement in labor market position contributed to a reduction in rate cut hopes.
Amidst this backdrop, the CME FedWatch tool that tracks the expectations of interest rate traders shows the likelihood of a quarter percentage rate cut in December at 49.6 percent. It has fallen from 62.9 percent a day ago and 66.9 percent a week ago.
Comments from Fed officials that provided no certainty about another rate cut in December also weighed on market sentiment for cryptocurrencies.
Sentiment towards cryptocurrencies, particularly Bitcoin have also been negatively impacted by concerns about a potential credit squeeze pressurizing digital asset treasuries.
According to data obtained from Coinglass, Bitcoin reserves of public companies aggregate to 1.05 million, which is almost 5.3 percent of the total circulating supply of Bitcoin. Virginia-headquartered Strategy Inc (MSTR) tops the list with a holding of more than 641.7k Bitcoins.
Earlier this month reports emerged that French semiconductor business Sequans Communications S.A. (SQNS) offloaded Bitcoin from its treasury to pay back own debt. Despite overwhelming relief in global markets at an end to the longest-ever shutdown in U.S. history, aspiring digital asset Bitcoin and popular safe-haven asset gold have traversed in entirely different directions. While Gold extended gains, Bitcoin has steadily declined.
Concerns about the fiscal health of global economies as well as the demand for bullion by central banks have pushed up the demand for the yellow metal. Despite declining from the all-time-high of $4,398 per troy ounce recorded on October 20, Gold Futures for December settlement is currently trading at $4,173, implying year-to-date gains of 58 percent.
The Dollar Index which measures the dollar's strength against a basket of 6 currencies in the meanwhile is trading above the flatline. It is currently at 99.31 versus 99.16 at the previous close.
Market sentiment again became deeply entrenched in fear as evidenced by the CMC Fear and Greed Index, a proprietary tool developed by CoinMarketCap. The index has declined to 22 from 25 a day ago as rate cuts odds declined and crypto markets braced for a potential 'hold' decision by the Federal Reserve in December.
Amidst these developments, overall cryptocurrency market capitalization has plunged 6.1 percent in the past 24 hours to $3.27 trillion. 87 of the top 100 cryptocurrencies have declined more than 1 percent during the past 24 hours and only 2 are trading with overnight gains of more than a percent. The 24-hour trading volume has increased more than 35 percent to $240 billion.
Bitcoin has plunged 5.9 percent overnight and 3.6 percent in the past week to $96,997.79, around 23 percent below the all-time high of $126,198.07 recorded on October 7. The original cryptocurrency is holding on to gains of 3.9 percent on a year-to-date basis.
Bitcoin-based Spot ETF products in the U.S. witnessed outflows increasing to $867 million on Thursday from $278 million on Wednesday. Grayscale Bitcoin Mini Trust ETF (BTC) topped with outflows of $318 million followed by iShares Bitcoin Trust (IBIT) that recorded outflows of $257 million.
Ethereum tumbled 9.3 percent overnight to trade at $3,182.19. Year-to-date performance has resulted in a loss of 4.5 percent. Ether's current trading price is 36 percent below its all-time-high.
Ethereum-based Spot ETF products witnessed outflows of $260 million on Thursday versus outflows of $184 million on Wednesday. iShares Ethereum Trust ETF (ETHA) topped with outflows of $137 million.
4th ranked XRP slipped 9.3 percent overnight dragging down its current trading price to $2.28.
5th ranked BNB declined 5.3 percent overnight resulting in price decreasing to $914.23.
The price of 6th ranked Solana decreased 9.1 percent overnight to $141.69.
Solana-based Spot ETF products witnessed inflows declining to $1.5 million on Thursday from $18.1 million on Wednesday.
TRON ranked 8th overall lost 2.1 percent overnight and is currently changing hands at $0.2927.
9th ranked Dogecoin lost 7.5 percent overnight and is currently changing hands at $0.1632.
10th ranked Cardano declined 9.2 percent overnight to trade at $0.5174.
14th ranked Zcash (ZEC) that gained 4.9 percent and 16th ranked UNUS SED LEO (LEO) that rallied 2.3 percent are the only 2 cryptocurrencies among the top 100 cryptocurrencies to trade in the overnight green zone.
65th ranked Story (IP) topped overnight losses among the top 100 cryptocurrencies with a decline of 14.7 percent. 71st ranked Jupiter (JUP), 37th ranked Aave (AAVE) and 78th ranked Aerodrome Finance (AERO) have all declined more than 13 percent.
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