After a seven-day recovery period, the cryptocurrency market cap has declined by 5% since Sept. 14. It has dropped below $2T yet again, currently at $1.982 trillion.
Crypto total market cap. Source: TradingView
Crypto traders book profits ahead of FOMC
One of the key macro events setting the tone for this week is the Federal Open Market Committee (FOMC) meeting on Sept. 18-19.
Related: Markets see 0.5% Fed rate cut — 5 Things to know in Bitcoin this week
As traders expect market volatility around the event, the weekend price rejection indicates that short-term traders are potentially booking profits ahead of the FOMC meeting.
The selling pressure from short-term traders can also be estimated by the exchange spot netflow for most crypto assets.
Cryptocurrency exchange spot netflows chart. Source: Coinglass
Data from CoinGlass, for example, indicates that the 24-hour exchange spot netflows for Bitcoin (BTC), Ether (ETH), and Solana (SOL) have been negative, suggesting there are more sellers than buyers in the market.
Daily crypto liquidations total over $186M
Marketwide liquidation for most crypto assets resulted from Bitcoin’s price being unable to maintain above $60,000.
As observed, more than 65,000 traders were liquidated, with a total liquidation value of around $186 million.
Crypto liquidation heatmap chart. Source: CoinGlass
Ethereum traders witnessed over $55 million in liquidated positions, while $35 million in Bitcoin positions were wiped out. This is the largest liquidation event since Sept. 6, when BTC dropped to $52,500.
The liquidations increased further selling pressure on the crypto markets, leading to a marketwide correction during the start of this new week.
Crypto market cap fails to break long-term downtrend
While the total crypto market cap rallied 12% during the second week of September, the price action failed to buckle the downtrend market structure.
As illustrated in the chart below, the crypto market cap failed to break above $2.1 trillion, which has previously acted as a point of support and resistance during Q2 and Q3, respectively.
Crypto total market cap. Source: TradingView
Additionally, the crypto market failed to break from a lower-high market structure, with a descending trendline holding the total market cap at the $2 trillion range. The 200-day EMA level, highlighted by the blue indicator, also presented resistance at the same aforementioned total valuation.
Lastly, Fibonacci retracement lines also indicate a continuation of a bearish trend since the total market cap tested 0.618 Fib level before its current decline.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.