Cryptocurrency markets were thrown into a whirlwind on Wednesday as Federal Reserve Chair Jerome Powell’s hawkish remarks sent ripples through leveraged trading positions. A staggering $200 million in liquidations swept across digital assets within a single hour, according to CoinGlass data, as Bitcoin (BTC) took a nosedive below $116,000 during Powell’s address. The central bank opted to keep interest rates steady, but Powell’s cautionary tone about potential inflationary pressures tied to tariffs left traders on edge.
Markets in Flux
As the dust began to settle, Bitcoin managed to claw its way back above $117,000, though it remained 0.8% down for the day, hovering at the lower end of its recent narrow trading range. Ether (ETH), too, faced turbulence, sliding by as much as 3% before stabilizing at $3,750, down 0.6% over the past 24 hours. Altcoins experienced even more dramatic swings—Solana’s SOL, Avalanche’s AVAX, and Hyperliquid’s HYPE tokens initially plummeted by 4-5% before making a swift recovery. Meanwhile, BONK and PENGU suffered a sharp 10% drop before bouncing back. This aligns with recent observations where $150 billion was wiped out from crypto markets, highlighting the volatility in the sector.
While the crypto world was reeling, the traditional stock market painted a different picture. Tech giants like Meta and Microsoft unveiled robust quarterly earnings, propelling their stocks up 10% and 6% respectively in after-hours trading.
A Hawkish Turn
Matt Mena, an analyst at digital asset issuer 21Shares, shared his perspective in a market note, suggesting that the market is increasingly anticipating that the Fed may be lagging in its response. “Last week’s PCE print marked the second soft reading in a row, and consumer spending is weakening,” Mena observed. “With unemployment creeping up and real yields remaining high, there’s a risk of tightening too much and triggering a broader economic slowdown.”
Mena drew parallels to the final quarter of 2023, when softening inflation, political volatility, and a Fed hamstrung by outdated indicators painted a complex economic picture. He posited that the current environment could set the stage for the Fed to consider lowering rates, a move that could potentially catapult Bitcoin to $150,000 by the end of the year.
Historical Echoes and Future Uncertainties
The crypto market’s volatility in response to Powell’s comments harks back to similar episodes in recent memory, where Federal Reserve signals have prompted rapid shifts in trading strategies. Such swift market reactions underscore the sensitive interplay between monetary policy and digital asset valuations. For more on the recent price movements, see our coverage of Bitcoin’s slide below $117.5K.
The path forward remains uncertain. Some analysts caution that the Fed’s current stance may not shift as swiftly as some traders hope, citing persistent economic challenges and geopolitical tensions that could influence future policy decisions. Others, however, remain optimistic about the potential for a more accommodative stance, especially if inflationary pressures continue to abate and the broader economic landscape shows signs of stress.
As the crypto community digests the implications of Powell’s warning, the question on many minds is whether this latest episode of turbulence will lead to new opportunities or further setbacks. With the Fed’s next moves closely watched, traders and analysts alike are bracing for what the coming months might bring—keeping a keen eye on macroeconomic indicators and their potential impact on the digital currency realm.
Source
This article is based on: Crypto Bulls Get Hit With $200M in Liquidations as Powell Rattles Market With Fed Warning
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
