Key takeaways:

• Bitcoin’s sharp 8% drop triggered $1.5 billion in forced liquidations, ending a tight two-month small-cap correlation.
• Worsening market sentiment was driven by $2.1 billion in Bitcoin ETF outflows and rising fears of a Federal Reserve interest rate hike.

Bitcoin (BTC) faced a sharp 9% drop over 48 hours, hitting the $67,000 support for the first time in two months. This correction wiped out a substantial $176 billion from the total crypto market cap in just two days, triggering $1.5 billion in forced liquidations for overleveraged long positions.

Traders remain uncertain about the drivers behind crypto’s underperformance, especially since US equities have shown notable strength.

US Russell 2000 small cap equities index (left)…