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Massive Crypto Liquidations Hit as Fed Rate Cut Bets Fade

The post Massive Crypto Liquidations Hit as Fed Rate Cut Bets Fade appeared first on Coinpedia Fintech News

The crypto market faced heavy turbulence in the last 24 hours, with over $270 million in liquidations hitting traders. Ether and bitcoin longs led the wipeout, with $170 million in ETH and $104 million in BTC positions flushed. According to Derive.xyz founder Nick Forster, this was more of a reset in positioning rather than a structural shift, triggered by fading expectations of a September Fed rate cut.

Polymarket data shows the odds of “no cut” jumped from 12% to 26%, forcing traders to recalibrate risk ahead of Jerome Powell’s much-anticipated Jackson Hole speech later this week. However, the price reaction was relatively modest, with Bitcoin slipping about 2% and Ethereum falling 3%, yet leveraged traders bore the brunt of the losses.

Volatility on the Rise

The shift in sentiment spilled into derivatives, with Ethereum’s seven-day implied volatility climbing to 73% from 68%. Forster noted the odds of Bitcoin hitting $100,000 before September’s close rose to 21%, while Ethereum faces a 60% chance of correcting to $4,000. 

SignalPlus head of Insights Augustine Fan added that markets have already ruled out any chance of a bigger 50-basis-point cut, with nearly 90% of bets leaning toward a single, smaller cut. “We’re not expecting many dovish surprises given the inflation backdrop,” Fan said.

Ethereum Whales Shrink, Sharks Accumulate

Amid the liquidations, Ethereum’s on-chain picture revealed an interesting shift. Analyst Joao Wedson highlighted that the number of ETH whales has been steadily dropping, but this doesn’t mean weakness. Instead, mid-sized “Shark” wallets holding 10,000–100,000 ETH have been aggressively buying. Since April, these addresses have added 4.4 million ETH to their holdings, suggesting that real market momentum may be in their hands.

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This shift mirrors trends in Bitcoin, where whales often represent exchanges or dormant wallets, while mid-sized players drive active price action. For Ethereum, this Shark accumulation could provide a cushion against further downside as traders await Fed signals.

Price Action Across Majors

Bitcoin slipped to $115,036, its lowest level in nearly two weeks, while Ethereum traded at $4,235. Interestingly, XRP showed more resilience compared to its peers, holding around $3.02. However, its weekly gains shrank to 4%, down from 9% earlier in the week.

In short, the coming days will likely be dictated by Powell’s comments in Jackson Hole. With inflation still in the spotlight, traders are hedging for turbulence but not yet signaling a full-blown bearish trend.

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FAQs

How is the crypto market doing today?

The market is choppy: BTC $115K, ETH $4.2K, XRP $3.02, with traders bracing for Fed signals.

How do Fed rate cuts impact the crypto market?

Rate cuts lower borrowing costs, boost liquidity, and often drive demand for risk assets like crypto.

What is the significance of the upcoming Jackson Hole speech?

Jerome Powell’s speech at the Jackson Hole Economic Symposium is highly anticipated because his comments could provide crucial signals about the Fed’s future monetary policy and interest rate plans.