Bitcoin at one-week lows: more than 62,000 crypto traders liquidated

Another day in the red for the cryptocurrency market, with Bitcoin at one-week lows, close to the $19,000 area, and Ethereum touching the $1,000 mark. Total capitalization is down around $100 billion to $870 billion from $970 billion a few days ago, when the main market currencies experienced a series of bullish days that led digital currencies to rises led by Bitcoin to $22,000.

However, the market turned around and the break of $19,500 for Bitcoin may signal that more pain is to come in the digital currency, stated Craig Erlam, analyst at Oanda. Experts pointed to the June lows, when Bitcoin gave up below $18,000 as the level to watch for potential declines.

Amid the bearish price action, more than 62,000 traders were liquidated in the cryptocurrency market, as CoinGlass data suggested. Over the same period, more than $180 million was liquidated. Ethereum leads the settlements with almost $62 million settled in the last 24 hours, followed by Bitcoin with $59.95 million and Solana with $3.42 million in the same period.

Total cryptocurrency trading volume has fallen to just over $50 billion, an 86% decline from its all-time high of nearly $367.6 billion recorded on May 20th, 2021, according to analytics data from CoinMarketCap. The long-term downward movement in Bitcoin´s price has also forced many miners to offload their holdings to cover operating costs.

The main drivers of the bearish action are plummeting cryptocurrency trading volumes, selling pressure from miners and the elevated expectation of another rate hike by the Federal Reserve (Fed). Investors will get more clarity on this point following the release of US inflation data today, on Wednesday. A soft reading on this indicator could give Bitcoin some momentum along with stocks, at least temporarily. The line in the sand is probably just below the June lows around $18,500, noted Jeffrey Halley, analyst at Oanda.

This report is likely to show consumer inflation accelerated to 8.8% year-over-year, which will be the fastest pace since 1981 or nearly 41 years. However, the core inflation reading could slow to 5.7%.

"The most important aspect of this data will be how the Fed will perceive this reading and, secondly, how market players will translate this figure. As for the Fed, it is very likely that it will continue with its aggressive monetary policy and a strong number will only increase the odds of a 75 basis point rate hike," commented Naeem Aslam, head of analysis at Avatrade.