Crypto Markets Face Turbulence Amid Massive Liquidations
By: Eva Baxter
The cryptocurrency market has been caught in a whirlwind of volatility following a significant downturn linked to recent announcements by the Federal Reserve on its monetary policy. Within a brief 24-hour window, the market shed approximately 10%, shaking investor confidence and triggering a massive sell-off. Analysis indicates that the Federal Reserve's decision to maintain a hawkish approach, notably reducing the forecast for rate cuts in 2025, has spurred investor anxiety.
Major cryptocurrencies have not been spared by this period of instability, with Bitcoin plunging nearly 10%, dropping to a low of $93,000. This marks a considerable decline from the highs of $108,268 seen just earlier in the week. Similarly, Ethereum experienced an even more severe drop, losing about 15% of its value and hitting a low of $3,100. This represents the cryptocurrency's weakest point since late November.
Other digital currencies, including Binance Coin (BNB), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA), also registered double-digit losses. Analysts highlight the market's broader sell-off can be attributed to the Federal Reserve's unchanged policy on interest rate adjustments, coupled with a revision of its rate cut plans for 2025. This outlook has played a pivotal role in deepening market uncertainty.
The repercussions of these policy updates have been profound, resulting in over $1.2 billion in liquidations affecting 377,618 traders. According to data from CoinGlass, long traders, those betting on price increases, incurred around $1.07 billion in losses. Short traders, who had wagered on price declines, lost about $163 million. Highlighting the turbulence was a significant single liquidation on Binance, with a $15 million ETH-USDT transaction.
Altcoins have not been immune to this turmoil. Ethereum saw a 16% drop, with XRP and Dogecoin down 18% and 26% respectively over the same period. Traders on major altcoin bets including Solana and XRP have faced significant losses, in one of the most consequential market adjustments witnessed this year. As the market grapples with the impact of these developments, many are closely monitoring central banks' future monetary pathways and their implications for digital assets.
