The crypto market plunged as Bitcoin retreated from record highs, triggering widespread selling and liquidations. Economic factors and technical trends compounded investor caution ahead of key Fed decisions.

The cryptocurrency market faced a notable decline, with its total market value decreasing by 3% to $3.65 trillion. This downward momentum was largely driven by Bitcoin's retreat from its all-time high of $108,364 to $103,173, which sparked widespread selling pressure across the digital asset space. Other prominent cryptocurrencies such as Ethereum, Dogecoin, Cardano, and Tron also suffered notable losses. Liquidations in the derivatives market further intensified this trend, as the sudden decline led to the wiping out of $419 million in positions, including $333 million in long positions. This setback aligns with broader economic concerns, reflecting negative shifts in equity markets such as the S&P 500 and Nasdaq indices. The anticipation surrounding a Federal Reserve interest rate decision has also contributed to investor caution. With high market leverage and economic uncertainties looming, traders seem to be exercising a risk-averse approach. Technical analysis highlighted a bearish divergence in the market's relative strength index (RSI), which predicted a weakening uptrend. Coupled with overbought conditions observed over the previous month, this added to the downward correction. Moving forward, investors are closely watching whether the market will stabilise at the $3.5 trillion support level or experience renewed buying activity, potentially restoring its recent highs. However, uncertainty around the economic environment and central bank policy continues to cast a shadow.