Bitcoin is currently experiencing a sharp decline as the market begins to realize that hopes for an interest rate cut by the Federal Reserve (Fed) are fading.
At the time of writing, the price of Bitcoin is currently at $68,950, down 0.02% since it opened early Friday in Asian trading.
Instead, speculation is now shifting to the possibility that the Fed will raise interest rates again, following concerns that inflation may remain high and uncontrollable.
This dramatic change in market sentiment shows how sensitive crypto asset prices are to global monetary policy.
According to data from CME FedWatch and a crypto industry report on March 26, the market is no longer expecting any interest rate cuts this year.
In fact, futures contract prices are now reflecting the possibility of a rate hike of 0.15% by the end of the year, with some expecting this increase to continue into next year.
The market scenario that was previously focused on rate cuts has now completely reversed, creating significant uncertainty among investors.
As a result of fears of monetary tightening, the price of Bitcoin fell to almost $68,000.
On the Binance USDT market, the price of Bitcoin once reached $68,153 before recovering slightly to around $68,830, marking a decline of almost 3.5% compared to the previous day.
With no sign of a Fed pivot, investor appetite for risk seems to have sharply diminished.
This sharp price drop also led to forced liquidations in the Bitcoin market.
In the past 24 hours, a total of $330 million in positions were liquidated, with $290 million of which being long/bullish positions hoping for a price increase.
Meanwhile, short/bearish positions only contributed $40.08 million, indicating that the biggest impact was concentrated on investors who took bullish positions.
