Leading cryptocurrencies slid sharply on Tuesday as investors' risk appetite tapers ahead of key inflation data and the Federal Reserve's interest rate decision.

What Happened: Bitcoin tumbled to lows of $66,100 earlier in the day before making a slight recovery to $67,100. Ethereum dipped below $3,500 for the first time in three weeks.

The downtrend triggered liquidations worth $261 million in the last 24 hours, with about 100,134 traders getting "rekted." Around $224 million in long positions were wiped out.

Speculative interest cooled down, as the Open Interest in Bitcoin futures dropped 3% in the last 24 hours. A fall in price, coupled with a fall in OI, confirms a downtrend.

Moreover, the number of traders betting on Bitcoin's price increase dropped further vis à vis those looking to profit from its decline, indicating a bearish sentiment.

Top Gainer (24 Hour)

The global cryptocurrency market cap is $2.44 trillion, declining 3.50% in the last 24 hours.

Stocks closed at record highs Tuesday. The broader index, S&P 500, rose 14.53 points, or 0.27%, to close at 5,375.32, while the tech-heavy Nasdaq 100 gained 0.88% to finish at 17,343.55. The Dow Jones Industrial Average, however, fell 0.31% to end at 38,747.42.

The rally was led by Apple Inc. (NASDAQ:AAPL), which surged more than 7% during the session.

The Federal Reserve began its two-day FOMC meeting, which will conclude on Wednesday with a decision on interest rates. Fed Chair Jerome Powell will hold a press conference later.

There was a 98% probability that the central bank will keep rates steady, according to CME FedWatch Tool.

Analyst Notes: On-chain analytics firm Santiment noted a surge in buy calls for Bitcoin on social media after the dip below $67,000.

"Historically, when the amount of sell calls (in red) is closing the gap on buy calls, that is when the panic and FUD is setting in, and most commonly leads to crypto bounces," Santiment stated.

"Historically, this is followed by 1-2 years of upward trends and frequent new all-time highs, with price increases of 2x to 10x," Peterson remarked.

Bitcoin's dip below $67K has ramped up the amount of buy calls (in blue) on social media. Historically, when the amount of sell calls (in red) is closing the gap on buy calls, that is when the panic and FUD is setting in, and most commonly leads to crypto bounces. pic.twitter.com/chDjsle928

— Santiment (@santimentfeed) June 11, 2024

In a more assuring take for the bulls, prominent cryptocurrency analyst Michaël van de Poppe pointed out that Bitcoin and the broader cryptocurrency market invariably correct before the Fed's interest rate decisions and inflation data release, and resume their uptrend after.

It's a big week for the markets, as tomorrow the markets will receive the new CPI data & interest rate decisions from the FOMC.#Bitcoin and crypto almost always correct before the event, and return upwards after.
In the previous months, the same price action took place.

— Michaël van de Poppe (@CryptoMichNL) June 11, 2024

Photo by Matt Benzero on Shutterstock