BREAKING: Bitcoin loses $4K as 207,527 investors crypto accounts liquidated

The flagship crypto dropped about $4K in just a few hours after notes from the Fed’s December FOMC session re-confirmed plans to reduce the balance sheet.

Bitcoin fell below $42.5K in the early hours of Thursday as the dollar rallied and encouraging economic news from the United States loosened investors’ grasp on riskier financial assets.

What You Need To Know

The Federal Reserve signaled that a rate hike could happen in March rather than the customary timetable, which caused an intraday sell-off.

207,527 traders liquidated a total of more than $800 million in trading positions during the day. On Bitmex, $10 million in XBTUSD was liquidated.

While some investors are flocking to safe-haven currencies, others are flocking to alternative cryptocurrencies (altcoins) such as Solana, XRP, and Polkadot, all of which are down more than 10%.

Despite the attention on altcoins, purchasing pressures in Bitcoin and Ethereum have decreased for the time being. If BTC fails to break back above $45K, the market may enter a prolonged bear phase, with a retracement to the low $30K region.

The market capitalization of cryptocurrencies is now $2.04 trillion, down 8.53 percent from yesterday. However, activity is increasing, with the overall crypto market volume for the day reaching $122 billion, up 18.25%.

Bitcoin currently has a market share of 39.74 percent, up 0.39 percent from yesterday. On Wednesday, BTC’s dominance ratio — a measure of BTC’s market capitalization about another crypto – continued to fall, reaching 39%. This is the lowest ratio since April 2018, when cryptocurrency prices were in freefall.