Crypto Market Sees $634M Liquidations Ahead of Fed Decision

The crypto market remained under pressure on Sept. 16 as Bitcoin traded near $75,000 ahead of the Federal Reserve’s policy decision. BTC lost roughly 2%-3%, while leveraged traders suffered another large round of forced liquidations.

CoinGlass data showed about $634 million in positions liquidated over 24 hours, with long traders absorbing most of the losses. The Federal Reserve now represents the next major catalyst after the CLARITY Act failed to advance in the Senate.

Crypto Market Crashes Triggering $634 Million In Overall Liquidations

Crypto markets recorded $667 million in liquidations as Bitcoin sold off following the CLARITY Act setback and concerns over a potential Fed rate hike. According to data from Coinglass, long liquidations are now at $525 million, while short liquidations stand at $109 million. In the last 24 hours, a total of 113,141 traders were liquidated.

With long positions heavily concentrated, the decline triggered a significant leverage flush across the broader crypto market. However, market experts remain divided on whether there’s more pain ahead or if the bottom is already in for BTC.

Analyst Ted Pillows stated that the Bitcoin price lost its 50-week exponential moving average (EMA). Thus, he said Bitcoin could drop toward the $70,000-$72,000 zone before any reversal.

FOMC: How Will Bitcoin Price React to Fed Rate Hike?

Today’s FOMC meeting is expected to be closely watched by financial markets. As per the Fed watch tool, there’s nearly 93% probability of a rate hike. The market will focus on the Federal Reserve’s forward guidance and how policymakers view the path of interest rates.

If Fed Chair Warsh signals that the hike is a one-time move, the market could respond positively. However, if he emphasizes strongly on getting to the inflation target of 2%, it could be interpreted as a signal that further rate hikes remain possible.

Such a scenario could put pressure on stocks, cryptocurrencies, and precious metals. Besides, it will also push bond yields higher.

Bitcoin price remains near the lower end of its current trading range ahead of the FOMC meeting, noted Daan Crypto Trades. The analyst said markets have priced in roughly a 90% chance of a rate hike, making Federal Reserve Chair Warsh’s post-meeting remarks a key focus.

He said that a hawkish stance by Kevin Warsh signaling further rate hikes this year could weigh on risk assets. However, if the dot plot remains unchanged and a rate hike is seen as a one-time move, risk assets, including Bitcoin, could see some upside.

Where is the Bitcoin Price Bottom?

Some market experts believe that the Bitcoin bottom is in and there’s not much downside left from here. Analyst Willy Woo noted: “I put the probability the bottom is in at 90%. We are in an early bull market structure based on long term investor liquidity returning”.

Another expert, CrediBULL Crypto, said that Bitcoin’s current decline should be viewed in the context of a broader market move, rather than focusing solely on short-term price action.

The analyst expects Bitcoin to form a bottom somewhere between current levels and a potential 10% further decline, which could be followed by a 200% upside.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments involve risk, and leveraged trading can result in substantial losses. Analyst forecasts do not guarantee future market performance.