Bitcoin plunged toward $95K, unleashing $617 million in crypto liquidations as traders unwind amid rising interest rate risk.
Key Takeaways:
- A sharp reversal in Fed rate cut expectations sparked a rapid unwind of leveraged positions.
- The $617 M liquidation wave hit across the crypto market, not just on Bitcoin.
- Spot Bitcoin ETF outflows accelerated as institutional investors reduced exposure, compounding thin liquidity.
Bitcoin saw a dramatic price decline during Asian trading hours, touching as low as $93,000, before stabilizing near $95,300. The plunge coincided with recalibrated bets on U.S. monetary policy, as the market notably trimmed its December rate-cut odds from over 60% to around 40% in just a week.
Bitcoin sits at approximately $95.3K at the time of writing (9:15AM UTC). Source: CoinMarketCap
Analysts said this shift caught many leveraged traders off guard, triggering margin calls and cascading liquidations across the crypto derivatives market.
$617M Liquidations Sweep Across the Market
This shift sparked panic across the crypto derivatives market, triggering a widespread chain reaction of forced liquidations and margin calls, where over $617.14 million in crypto positions were forced to close within 24 hours. According to CoinGlass’ real-time liquidation heatmap data, long made up the massive amount of liquidations, totaling to approximately $397.21 million, but shorts also saw heavy liquidations of nearly $219.83 million.
Data shows over $600 million of total liquidations in the last 24 hours. Source: CoinGlass
Bitcoin logged the highest liquidations among all the tokens, amounting to $246.05 million. Ethereum followed closely, seeing roughly $168.90 million wiped out in liquidations. Among the most notable individual events, a single Bitcoin long position worth $30.6 million was erased on Hyperliquid, highlighting the risks of high leverage in thinly traded markets.
Fed Policy Recalibration Triggers Sell-Off
Market participants widely attributed the sell-off to a more hawkish tone from U.S. central bank officials. Recent remarks by Fed Chair Jerome Powell emphasized that a December rate cut is “not a foregone conclusion,” with several other Federal Open Market Committee members echoing that caution. This pivot has introduced fresh risk aversion among traders, particularly in volatile assets like cryptocurrency, where macro sentiment heavily influences leveraged positions.
Real-Time Market Update
As of this writing (9:15AM UTC), CoinMarketCap’s real-time market data shows Bitcoin (BTC) is trading at approximately $95,322.21, reflecting a modest 24-hour drop of 0.69%. CoinGecko also reveals that the token reached intraday highs around $96,527.79 and intraday lows near $93,029.42.
The broader crypto market cap has contracted to roughly $3.31 trillion, indicating elevated selling pressure.
Outlook: Stabilization or Continued Downside?
The next several days will likely be critical for Bitcoin and the broader crypto market. Further Fed commentary will be watched closely by the traders as well as the market analysts, as any hints of a renewed dovish stance could help in stabilizing the prices. Conversely, continued ETF outflows or persistent macro risk could trigger further decline, particularly given the high levels of leverage still present in the market. Modest adverse news could trigger additional cascading losses according to analysts, while a return of liquidity could give higher chances of price rebound.
Summary
Bitcoin's rapid drop toward $95K forced $617M in liquidations across the crypto market as shifting Fed rate-cut expectations and ETF outflows combined with thin liquidity to squeeze leveraged positions.
