Bitcoin extends correction as risk appetite weakens…

Written by Samer Hasn, Senior Market Analyst at XS.com

Bitcoin extended its correction today, slipping toward $111,400 and testing its lowest levels in fifteen days. Ethereum suffered an even steeper pullback, breaking below the $4,000 mark for the first time since August, erasing much of the momentum from the latest bull run that had propelled the second-largest cryptocurrency to fresh record highs.

The persistent downward pressure is rooted in the absence of sufficient buying power to defend prices following the massive wave of liquidations seen on Monday. Another round of long liquidations today further weakened sentiment, while corrections in the broader equity market amplified the cautious tone, preventing bulls from regaining control.

According to CoinGlass, after Monday’s futures liquidation of more than $1.6 billion in long positions, today added another $280 million, including $56 million in Bitcoin and $180 million in Ethereum.

The funding rate on Ethereum futures also slipped back into negative territory, underscoring how leverage continues to exacerbate market fragility.

The last two days also seen a total long liquidation exceeded $350 million.

The weakness in crypto markets is moving in tandem with risk-off sentiment in equities. According to the Wall Street Journal, U.S. stocks fell for a second consecutive session on Wednesday, with declines concentrated in technology shares.

The optimism generated earlier this year by massive AI investments from companies such as Nvidia, Intel, Oracle, and Alibaba is now being countered by concerns that soaring costs could weigh on profits and valuations, according to The Journal.

Heavyweights like Nvidia, Apple, and Alphabet slipped nearly 1%, while financials also dragged the Dow lower, as Goldman Sachs and Morgan Stanley retreated on worries linked to the Fed’s recent rate cut and the potential impact of stricter H-1B visa rules.

These combined pressures left the Nasdaq and S&P 500 down about 0.3% and the Dow off 0.4%, reflecting a reassessment of risk amid higher costs and regulatory uncertainty. This correction seems to be spilled over to th crypto market, too.

The struggle for direction comes as investors await a series of speeches from Federal Reserve officials today and tomorrow, which may provide further clarity on the policy outlook. Key data are also due, with August’s PCE inflation report and the University of Michigan’s inflation expectations scheduled for release on Friday.

These releases will be critical in shaping the market’s conviction around the prospect of a 50-basis-point cumulative cut before year-end, a scenario that remains central to the broader narrative supporting risk assets.