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Bitcoin Tumbles From Multi-Month High on DOJ Worry, Hawkish Fed
Earlier Wednesday the crypto had touched its highest point since before the FTX collapse.
Updated Jan 18, 2023, 5:45 p.m. Published Jan 18, 2023, 4:39 p.m.
Just two hours after surging to a four-month high of about $21,550, the price of bitcoin (BTC) has tumbled nearly $1,000, now down 2.6% to $20,600.
More than $107 million was liquidated across crypto derivatives markets during the quick plunge, according to Coinglass.
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Helping to spur the slump was the U.S. Department of Justice (DOJ) teasing the announcement of a major international crypto enforcement action coming at noon ET. There were also some hawkish comments from St. Louis Federal Reserve President Jim Bullard, who suggested the central bank should hike interest rates by 50 basis points at its next meeting in February versus market expectations for a 25 basis point move.
All three major U.S. stock market indices are also in the red, with the Dow Jones Industrial Average leading the downside with a 1% decline.
Ether (ETH) is off 4% to $1,511.
Among crypto-related stocks pulling back are Coinbase (COIN) down 4%, Marathon Digital (MARA) down 17%, and MicroStrategy (MSTR) down 11%.
UPDATE (Jan. 18, 17:40 UTC): The government has charged little-known crypto platform Bitzlato with laundering funds tied to illicit Russian finance and its founder has been arrested. With the "major" perhaps somewhat overhyped, bitcoin has bounced a bit, now trading just below $21,000.
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- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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