Crypto Markets Jolt as Powell’s Hawkish Tone Triggers $200M in Liquidations
Digital asset markets were rocked Wednesday after U.S. Federal Reserve Chair Jerome Powell reiterated inflation concerns, sparking a wave of forced liquidations and volatility across major tokens.
Bitcoin (BTC) briefly fell below $116,000 as Powell spoke, triggering over $200 million in liquidations across crypto assets within an hour, according to CoinGlass data. The Fed kept interest rates unchanged at 4.25%-4.5%, though Powell warned that rising tariffs were exerting upward pressure on prices. Two Fed governors dissented, favoring a rate cut.
BTC later recovered above $117,000 but remained lower on the day, down 0.8%. Ether (ETH) dropped as much as 3% before rebounding to $3,750. Still, it closed modestly negative over the 24-hour period.
Altcoins faced sharper swings. Solana (SOL), Avalanche (AVAX), and Hyperliquid (HYPE) initially fell 4%-5%, while BONK and PENGU sank 10% before trimming losses.
“Markets are beginning to believe the Fed may be slow to adjust,” said Matt Mena, analyst at digital asset manager 21Shares. “Recent inflation data has softened, and consumer spending is waning. Maintaining restrictive policy now raises the risk of overtightening.”
Mena added that today’s macro setup echoes the late-2023 backdrop of softening inflation and political instability, with the central bank constrained by lagging indicators. He sees conditions aligning for a rate cut later this year, potentially driving Bitcoin to $150,000 by year-end.
Meanwhile, tech equities outperformed after the bell. Meta (META) and Microsoft (MSFT) both reported strong quarterly results, with shares rising 10% and 6%, respectively, in after-hours trading.
