The total crypto market cap dropped over 4.2% on Thursday to hover about $3.8 trillion during the mid North American session. Bitcoin (BTC) price slipped over 3% during the past 24 hours to reach a range low of about $108,787 before rebounding to around $109,693 at press time.
Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) led the wider altcoin market in a drop of more than 6%. As such, the crypto leveraged market extended the heavy liquidation of long traders recorded earlier this week with a total of $1.13 billion rekt today.
Top Reasons Why Crypto Dropped Today
Long Squeeze Impact
Since Monday, more than $2.8 billion has been liquidated from the leveraged crypto market, mostly involving long traders. As such, the wider crypto market has felt the impact of a long squeeze as more traders continue to turn bearish.
Technical Headwinds
The wider crypto market has been forming a short-term bearish outlook in the last few weeks. For instance, the Bitcoin price has been forming a symmetrical falling trend in the past two months.
With the wider crypto market highly correlated to Bitcoin, a bearish outlook is expected to continue in the near future. Moreover, more investors have been taking refuge in Gold, which recently broke out in a parabolic move.
Sell-the-News on Fed Rate Cut
The crypto market has experienced a series of cooling-offs since the Federal Reserve initiated its first rate cut of 25 bps on September 17. Crypto traders had anticipated the recent Fed rate cut, thus piled up buy orders, and have since been taking profits in a classic sell-the-news scenario.
What’s Next?
Is Altseason Out of the Picture?
According to crypto analyst Benjamin Cowen, the wider altcoin market will continue to bleed to Bitcoin until the end of October. As such, Cowen believes that Bitcoin dominance is likely to surge above 60% in the coming weeks.
The crypto analyst has reiterated that previous altseasons were too early as the real altcoin rally will likely kickstart in November after Ethereum price records consistent new all-time highs. The ongoing approval of spot altcoin ETFs by the U.S. SEC is a major milestone that will bolster an imminent altseason possibly before the end of this year.