Cautious comments from the Federal Reserve trigger a sharp “sell-the-news” reaction across digital asset markets
The crypto market faced intense turbulence this week as Bitcoin briefly dipped to nearly $108,000 before rebounding above $110,000, marking one of the most volatile sessions in months. The sudden swings coincided with the Federal Reserve’s 25-basis-point rate cut, followed by cautious guidance from Chair Jerome Powell that tempered investor optimism.
Blockchain derivatives data showed that over $817 million in leveraged positions were liquidated within 24 hours, signaling widespread market stress.
More than 165,000 traders were forced to close positions, with the largest single liquidation exceeding $11 million on a major exchange.
The heaviest losses occurred among long traders, as prices retreated sharply following Powell’s remarks.
“The Fed’s tone suggested that further easing isn’t guaranteed, and markets immediately adjusted expectations,” said one senior analyst at a digital asset research firm. “This triggered a ‘sell-the-news’ correction, especially after a multi-week rally driven by anticipation of the rate cut.”
Leverage and Market Sentiment Under Pressure
Exchange data indicated that liquidations totaled $282 million on one leading futures venue, followed by $223 million and $144 million on other platforms. Analysts noted that such large clusters of long liquidations often mark short-term bottoms, as overleveraged traders exit and spot buyers regain control.
“While short-term volatility remains elevated, the Fed’s plan to halt quantitative tightening in December could improve liquidity conditions for risk assets,” another strategist explained. “This environment typically benefits Bitcoin and Ethereum in the following months.”
Despite the pullback, sentiment across institutional desks remains moderately positive. Inflation data still hovers near 3%, limiting immediate policy flexibility, but expectations for renewed liquidity in early 2026 are growing.
Bitcoin’s ability to stabilize above $110,000 highlights resilient demand amid macro uncertainty — suggesting that current turbulence may be a recalibration, not a retreat.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.