The crypto market saw a sharp plunge, with total liquidations surpassing $850 million following the Federal Reserve’s 25-bps rate cut.
Federal Reserve Chairman Jerome Powell hinted at cautious future rate adjustments, which scared investors. He also mentioned the slower-than-expected decline in inflation and revised the 2025 inflation forecast to 2.5%. This raised fears of tighter economic conditions and liquidity across markets.
Bitcoin dropped below $99,000, marking an 8% fall from its record high of $108,000. Ethereum and other major cryptocurrencies followed suit, amplifying the market’s losses. Altcoins suffered significantly, contributing over $222 million to the liquidations.
Coinglass data revealed that $869.39 million was wiped out in 24 hours, including $749.59 million from long positions. Nearly 300,000 traders were affected, with Binance witnessing the largest liquidation, involving a $7 million Ethereum trade.
Crypto investors remain optimistic despite the downturn. The crypto fear and greed index is reading 75, meaning bullish sentiment. Bitcoin-related investment products saw strong inflows, with BlackRock’s iShares Bitcoin Trust surging $359.6 million on Wednesday alone.
These events have underscored the sensitivity of the crypto market to US monetary policy: while the Federal Reserve battles inflation, strong market responses make the asset class a barometer of wider crypto trends. Investors continued to consider digital assets as one of various hedges to uncertainty-a fact that suggests their persistent appeal.
