Cryptocurrency and Stock Market Decline Ahead of Inflation Data

On Tuesday, both leading cryptocurrencies and stock markets experienced a decline for the second consecutive day as investors prepared for an important inflation report.

Cryptocurrency	Gains +/-	Price (Recorded at 7:30 p.m. ET)
Bitcoin BTC/USD	-1.87%	$96,200.49
Ethereum ETH/USD	-4.59%	$3,601.65
Dogecoin DOGE/USD	-3.92%	$0.3943

What Happened: Bitcoin started the day at approximately $94,300 but managed to recover some losses, ending above $96,000 during overnight trading.

Ethereum mirrored Bitcoin's performance, initially falling from $3,750 to $3,522 before regaining some value later in the day.

In the past 24 hours, cryptocurrency liquidations exceeded a staggering $625 million, with long liquidations alone accounting for $484 million. If Bitcoin were to drop back down to $90,000, over $700 million in long positions would be in jeopardy of liquidation. Conversely, a rise to $100,000 could eliminate $719 million worth of short positions.

During this period, Bitcoin's Open Interest saw a decline of 3.33%, and there was a noticeable decrease in the number of traders taking long positions, which was reflected in the dropping Long/Short ratio.

Despite the downturn, market sentiment remained within the "Greed" zone, as indicated by the Cryptocurrency Fear & Greed Index.

Top Gainers in the Last 24 Hours

Cryptocurrency	Gains +/-	Price (Recorded at 7:30 p.m. ET)
XDC Network (XDC)	+19.52%	$0.09279
MANTRA (OM)	+14.73%	$4.04
Raydium (RAY)	+12.60%	$4.92

As of now, the global cryptocurrency market capitalization stands at $3.43 trillion, reflecting a 0.80% contraction over the last 24 hours.

The broader stock market also faced declines for a second day, with major averages closing in the red. The Dow Jones Industrial Average decreased by 154.10 points, or 0.35%, finishing at 44,247.83. Meanwhile, the S&P 500 slipped by 0.30% to conclude at 6,034.91, and the tech-heavy Nasdaq Composite fell by 0.25%, ending at 19,687.24.

This downward trend arrived just ahead of the significant consumer price index data for November scheduled to be released on Wednesday, a vital piece of information investors are closely monitoring ahead of the Federal Reserve's policy decision next week.

Market expectations are for an 85% likelihood of a 25 basis point rate cut, as per the CME FedWatch tool.

Analyst Insights

Renowned cryptocurrency analyst and trader Ali Martinez underscored the critical need for Bitcoin to maintain levels above $96,000; otherwise, it could plummet to as low as $85,000. He recommended that investors take advantage of the dip but advised against excessive leveraging, projecting a potential price target of $275,000.

Another well-followed trader, known as DevKhabib, foresees an additional dip for Ethereum before a robust recovery. He noted, "We bounced off $3,500 strongly, but as we approach the 3-year trend line, I wouldn’t be surprised to see another flush. After that, it’s up only season; everything will pump."

In Summary: Investors are bracing for critical inflation data and responding to the current market outlook, as prominent cryptocurrencies reflect trends similar to traditional stocks.

Bitcoin, Ethereum, Dogecoin, Stocks, Decline, Liquidation, Market