Crypto Market Liquidations Hit ~$500 Million On US Fed Rate Decision, BTC, ETH, HYPE Drop

Key Insights:

• Crypto market liquidations approached $500 million after the Federal Reserve held rates steady.
• Bitcoin and Ethereum accounted for more than half of all liquidated positions.
• Traders remain focused on key Bitcoin support near $63,850 as market sentiment weakens.

The crypto market faced renewed selling pressure after the Federal Reserve left interest rates unchanged, triggering nearly $500 million in liquidations across digital assets. Bitcoin, Ethereum, XRP, and Hyperliquid’s HYPE token all declined as traders reacted to comments from Federal Reserve Chair Kevin Warsh regarding future policy communication.

Data from CoinGlass showed that more than 116,000 traders were liquidated during the past 24 hours as volatility increased across the market.

Crypto Market Liquidations Near $500 Million

As per the Coinglass data, the total crypto market liquidations in the last 24 hours have surged to $491 million. Bitcoin (BTC) leads with $161 million in liquidations, while Ethereum (ETH) is the second at $123 million. A total of over 116,000 traders were liquidated during this period.

On June 17, the US Fed voted unanimously to keep the federal funds rate target range unchanged at 3.50% to 3.75%. It maintains its current policy stand of sailing through economic expansion and rising inflation.

The FOMC stated that the US economy continues to grow at a solid pace, while inflation remains above the central bank’s long-term target of 2%. Crypto market reacted negatively following the Fed’s first policy meeting under new Chair Kevin Warsh.

Fed Chair Kevin Warsh also announced that the central bank would discontinue its use of forward guidance. Thus, investors will get less visibility into the Fed’s future policy outlook, interest rate moves, and monetary policy decisions.

Analysts noted that reduced policy transparency could contribute to greater market volatility. Warsh also unveiled five new internal task forces aimed at reviewing various aspects of Federal Reserve operations. Nearly 50% of Fed officials believe the possibility of one rate hike in the coming year.

Global Macro and Crypto Market Position

Along with the FOMC meeting on Wednesday, the US-Iran peace deal was signed before the scheduled time of Friday. The two parties have agreed to end the war with immediate effect, with the Strait of Hormuz now open, similar to the pre-war times. A final deal will be signed after staying up to the promise of 60 days of no attacks.

There have been major shifts in the global macros after the FOMC. The US Bond yields have been correcting, with Brent crude also dropping to $75. However, risk-ON assets, including the crypto market, have also corrected amid the uncertainty with future Fed guidance.

Popular crypto analyst Merlijn The Trader noted that the crypto market is showing similar behaviour to the 2022 bear market. This hints at the possibility of correction after the latest recovery.

As per Merlijn, it is the right time for long-term investors to Dollar-Cost-Average (DCA) instead of going all in. He said that a deeper decline of the market to the 300 SMA can’t be ruled out. Following this, we could be heading towards a broader market recovery, noted the analyst.

Merlijn noted that the current market structure appears to be repeating that setup. The total crypto market cap has already reached the DCA zone and completed its first touch at the 200-day SMA.

Bitcoin Price Action Ahead

Popular analyst Michael van de Poppe stated that the next 48 hours will be crucial to see whether the Bitcoin price sustains the crucial support of $63,850 levels. If BTC fails to honour this support, we could be seeing a possible further correction in the range of $59,000-$60,000.

Another analyst, Miles Deutscher, also stated that he remains unconvinced by the current chart structure in BTC price. According to Deutscher, Bitcoin could experience a near-term bounce that may offer opportunities for swing traders. However, he believes that the broader trend remains bearish.

The analyst noted that until the larger market structure shifts and confirms a trend reversal, investors should remain cautious.

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