The crypto market is experiencing increased volatility, with both Bitcoin and alts falling, leading to large-scale liquidations.

June 12 is referred to as "Super Wednesday" by the financial markets, as two important events will take place that evening and the following early morning: the latest CPI data and the Federal Reserve interest rate decision announcement. These data may become the guiding indicators for the next wave of movements in the crypto market.

In the face of uncertainty regarding the future direction of the market, the crypto market experienced significant fluctuations ahead of "Super Wednesday." Although Bitcoin's opening price yesterday was close to $70,000, it failed to hold that resistance level and fell to the $66,000 range, briefly touching a near three-week low of $66,170 on Tuesday evening.

According to data platforms, although Bitcoin has rebounded to around 67,000 USD, its 24-hour fall is still 1.1%. In contrast, the pullback of alts is more significant, with a certain crypto index experiencing a decline of over 6%. The prices of the 20 cryptocurrencies included in the index generally fell, with Ethereum breaking below 3,500 USD (a drop of 6.5%), and other major alts such as SOL, DOGE, ADA, and LINK seeing declines of approximately 6-9%.

The sudden pullback in the crypto market caught investors off guard, triggering a large-scale liquidation. According to a data platform, over $250 million in leveraged derivative positions across the network were liquidated this morning, primarily involving long positions. This is the second instance of large-scale leveraged surges within a week, following last Friday's $400 million liquidation. Currently, the total liquidation amount across the crypto market has slightly narrowed to $219 million.

Despite the slightly chaotic macroeconomic situation, the cryptocurrency industry does not seem to be overly pessimistic. Some fundamental indicators are still performing well:

1. In terms of on-chain data, Ethereum's user base continues to grow, with the number of active addresses and new addresses reaching historically relatively high levels, which may indicate the network's long-term health and growth potential.

2. In terms of on-site funds, the holdings of stablecoins, which serve as safe-haven currencies, have significantly decreased on exchanges. This may indicate a recovery in market confidence, and investors may be reallocating funds into higher-risk assets in search of better returns.

3. In terms of the macro economy, the Personal Consumption Expenditures ( PCE ) index announced on May 31 was 2.8%, similar to the Consumer Price Index ( CPI ). It is expected that this data has already been absorbed by the market and is unlikely to change the Federal Reserve's current wait-and-see attitude.

Some institutional investors are still optimistic about the future upward trend of the crypto market. A certain encryption investment institution believes that despite the short-term market pressure leaning towards risk aversion, it is still a good opportunity to accumulate cryptocurrencies. Positive events include the launch of spot Ethereum ETFs and political figures engaging in verbal battles to win over crypto voters.

Another research institution pointed out that Bitcoin may experience frequent fluctuations in the near future, as the crypto market is "highly sensitive" to recent economic data and "highly correlated" with the US stock market. Their research shows that offshore traders who were bullish over the past two weeks currently hold losing positions in Bitcoin, putting the market at risk of a potential long squeeze.

At this stage, the expectations for the future in the crypto market are mainly influenced by changes in monetary policy. The market seems to be in the preparatory phase for the next bull market. The key focus points for the future market include:

1. When will the Federal Reserve start cutting interest rates, and how do non-farm employment data affect expectations for the timing of rate cuts.
2. The approval of the Ethereum ETF, the revival of old DeFi projects, and the market's expectations for the Ethereum ETF.
3. The relationship between the change in sentiment of Bitcoin ETF capital inflow and the fundamentals of the virtual asset market.
4. The expectation gap between macroeconomic trends and actual market responses.

Overall, the recent pullback in the cryptocurrency market this week has not affected the overall positive trend of the market. Some market observers have pointed out that certain positive signs that emerged during the sell-off may indicate a rapid economic recovery. In fact, Federal Reserve Chairman Powell stated two months ago that most FOMC members believe that a certain point this year is suitable for lowering the policy interest rate, but the Federal Reserve still needs greater confidence to ensure that inflation sustainably falls to the target level of 2%.

As other countries around the world continue to cut interest rates, it will be difficult for the United States to ignore this, and Bitcoin seems to be gradually digesting the impact of the Federal Reserve's interest rate cuts. A cryptocurrency analyst noted that Bitcoin had several pullbacks before this year's FOMC meeting, but soon reversed the trend shortly after.

Overall, although the market may continue to fluctuate in the short term, the long-term outlook remains positive. Investors should closely monitor the upcoming economic data and policy decisions while managing risks cautiously.