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Bitcoin (BTC) continued its bearish price action for the third straight day, with the leading cryptocurrency dropping to a weekly low of $21,814 today, according to data from CoinMarketCap.
After a short recovery, Bitcoin now changes hands at around $21,785 a piece, down 6.9% on the day despite a 7.69% jump in daily trading volumes.
The market capitalization of Bitcoin has more than halved, plummeting from $1.27 trillion last November to under $417 billion today.
Ethereum, the second-largest cryptocurrency by market cap, has also slipped to around $1,728, a 6.2% decline over the past 24 hours.
With a current market capitalization of $211.5 billion, ETH is down 64.49% from its all-time high of $4,891 recorded in November, according to data from CoinMarketCap.
Amid the bearish price action, over $537 million from 156,155 traders have been liquidated in the crypto market over the past 24 hours, suggests data from Coinglass.
Bitcoin leads liquidations with $201.3 million, followed by Ethereum with $132.7 million over the same period.
The vast majority of liquidations for the two leading cryptocurrencies came from blown-out long positions.
Other cryptocurrencies, including Binance Coin (8%), Solana (11.6%), Polygon (11.85%), and Avalanche (14.3%), have also posted tremendous losses over the past 24 hours, according to CoinMarketCap.
Bitcoin, Ethereum react to the Fed
The market’s bearish price action is likely linked to the Fed’s expected rate hike next month and the reduced DeFi activity.
As reported by Wall Street Journal, St. Louis Fed President James Bullard favors a 0.75% rate hike by next month. Mary Daly, San Fransisco’s Fed President, also confirmed a 0.50% or 0.75% rate hike next month, as reported by Reuters.
Both have confirmed that the rates could be hiked as long as rising inflation is controlled.
User activity across all DeFi applications on Ethereum has also been negative over the last week, following concerns related to the upcoming merge event.
According to data from Dune Analytics, decentralized exchange (DEX) trading volume has dropped 34% over the past 24 hours.
As per data from DefiLlama, the total value locked (TVL) across all the blockchains is down over 3.75% in the past 24 hours, indicating reduced user interest in DeFi.