Crypto Market Slips 1.2% to $3.9 Trillion Ahead of Fed Chair Powell Speech
Bitcoin and major altcoins fell sharply after Jerome Powell signaled no guarantee of another rate cut, sparking broad risk-off sentiment and significant crypto futures liquidations.
The cryptocurrency market retreated sharply after the U.S. Federal Reserve cut interest rates by 25 basis points but signaled that further reductions in December are not assured. Bitcoin fell 2.5% over 24 hours to around $110,200, and the CoinDesk 20 index dropped 1.7%. Powell’s cautious stance triggered a sell-off across risk assets, wiping over $80 billion from crypto’s market cap and causing more than $820 million in liquidations, with longs accounting for 79% of the total. Additional pressure came from looming $13 billion in Bitcoin options expiring on Friday, potentially increasing volatility. Altcoins like XRP and XLM led losses, while TRUMP, a U.S. president-backed memecoin, gained 6.8%. Derivatives data showed resilient open interest and normalized funding rates despite the pullback.
- Liquidations: Forced closure of leveraged positions when a trader's margin falls below required levels, often triggered by sharp price movements.
- Negative Gamma: An options market condition where dealers’ hedging activity can exaggerate price swings, often near large expiry dates.
- Put-Call Volume Ratio: A metric comparing the trading volume of put options versus call options, used to gauge market sentiment.