What seemed like prime time for crypto assets due to softening inflation data has turned into an ugly week as bitcoin {{BTC}} tumbled to its weakest price in four weeks on Friday.
BTC plunged more than 2% in an hour during the US trading session from around $67,000 to $65,100. The leading crypto is down 7.5% over the past seven days.
Smaller cryptocurrencies saw even steeper declines, with the broad market benchmark CoinDesk 20 Index losing almost 12% weekly. Ether {{ETH}} fell to $3,400, losing over 10% over the period, while native tokens of rival layer 1 networks Solana {{SOL}}, Avalanche {{AVAX}}, Cardano {{ADA}} and Near { {NEAR}} showed a decline of 15% to 20%, CoinGecko data shows.
The rapid fall saw nearly $180 million worth of leveraged derivatives trading positions across all crypto assets liquidated in the past 24 hours, most of which had long been betting on higher prices, CoinGlass data showed. This week’s shakeout saw a total of more than $870 million in liquidations, removing excess debt from the markets.
Analysts and many market participants expected an imminent breakout for bitcoin to new all-time highs just a few days ago, supported by a slower pace of inflation and softer economic data, but attempts at a rally were quickly sold off, leaving BTC stuck in its sideways range.
Read more: This is why Bitcoin is not keeping pace with Nasdaq
The Federal Reserve on Wednesday forecast just one interest rate cut this year, fewer than the central bank’s previous forecast, dashing investors’ hopes for looser monetary policy next summer. Political uncertainty in Europe and the declaration of early elections in France also pushed the US dollar index (DXY) higher against other major currencies to its strongest level in more than a month, putting pressure on Bitcoin.
Bitcoin also suffered from increased selling by miners and profit-taking by long-time holders near $70,000, 10X Research noted, which weighed on the broader crypto market.
