Bitcoin Falls Below $100K, $700M in Crypto Longs Liquidated; XRP and DOGE Suffer Sharp Losses
Bitcoin (BTC) slid below the $100,000 threshold late Wednesday, triggering a massive wave of liquidations across crypto futures markets, including a staggering $70 million in liquidations for XRP and Dogecoin (DOGE). This sell-off came as the Federal Reserve hinted at a more cautious approach to rate cuts, dampening investor sentiment and sparking broader market losses.
BTC experienced a notable dip after Federal Reserve Chairman Jerome Powell made comments that negatively impacted the market. During a press conference, Powell clarified that under current regulations, the Federal Reserve cannot hold Bitcoin, effectively responding to President-elect Donald Trump’s proposal for the U.S. government to establish a Bitcoin reserve. “This is a decision for Congress, but we are not seeking to change the law,” Powell stated.
The market reacted swiftly to Powell’s comments, with Bitcoin falling 3% and major altcoins following suit. XRP, Dogecoin, and Solana (SOL) saw losses of over 5%, while Ethereum (ETH) and Binance Coin (BNB) dropped about 2.5%. Chainlink (LINK) saw the largest decline, plummeting 10% and erasing recent gains.
The drop led to over $700 million in liquidated positions, with smaller altcoins and meme tokens seeing greater losses than Bitcoin and Ethereum. This unusual liquidation pattern suggests heightened volatility and speculative activity in the altcoin market.
Some analysts believe this may signal a market turning point, with traders reassessing their expectations for the remainder of the year. “Powell’s comments could mark a local top for crypto prices, especially now that the U.S. Bitcoin reserve narrative is off the table,” said Nick Ruck, Director at LVRG Research.
Despite the correction, there are still pockets of optimism in the market. Traders at QCP Capital, a Singapore-based trading firm, maintained a bullish outlook for the upcoming year.
“While short-term volatility is expected, the outlook for 2025 remains strong, especially with favorable policy shifts in the U.S. under Trump. Stick to your positions, as the long-term potential for crypto is still intact,” the firm stated in a recent market update.
As the market processes these developments, attention will turn to future regulatory announcements and economic conditions that could shape the direction of the crypto markets in the months ahead.
