The Bitcoin price plunge has wiped out over $700 million in cryptocurrency bets, with Ripple suffering significant losses. The market reaction to Federal Reserve Chair Jerome Powell’s comments sent shockwaves through the market, causing a dive across major cryptocurrencies.
Bitcoin‘s Nosedive to Under $100K Shaves $700M Crypto Longs
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Market Reaction to Powell’s Comments
A bitcoin (BTC) slump spiraled into over $700 million worth of liquidations across futures tracking major tokens, with XRP and dogecoin (DOGE) products recording unusually high losses. BTC fell under $100,000 in late U.S. hours before slightly recovering during early Asian hours Thursday.
The Federal Reserve hinted at a few rate cuts in 2025, but Fed chair Jerome Powell’s comments at a post-FOMC press conference sent shockwaves through the market. In response to a question about President-elect Donald Trump‘s strategic reserve promises, Powell said that the central bank wasn’t allowed to own bitcoin under current regulations.
“That’s the kind of thing that Congress should consider, but we are not looking for a law change,” Powell said. This statement caused BTC to fall 3%, leading to a dive across majors. XRP, dogecoin (DOGE), and Solana‘s SOL fell as much as 5.5%, with BNB Chain’s BNB and ether (ETH) down 2.5%. Chainlink‘s LINK fared the worst with a 10% drop.
Market Liquidations
The market slide led to over $700 million in bullish bets liquidated, with futures tracking smaller altcoins and meme tokens recording higher losses than BTC or ETH futures in an unusual move, data shows. A liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to the trader’s inability to meet the margin requirements.
Large-scale liquidations can indicate market extremes, like panic selling or buying. A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.
Trader Perspectives
Some traders say Powell’s comment may mark a local top, dampening expectations of a continued rally toward the end of the month. “Crypto markets may have entered a peak if a U.S. Bitcoin strategic reserve is no longer in play, as this promise helped to fuel the recent months’ rally to new all-time highs,” Nick Ruck, director at LVRG Research, shared with CoinDesk in a Telegram message.
However, traders at Singapore-based QCP Capital remain generally bullish for the coming year. “Don’t get shaken out of your positions if a drop occurs. With 2025 poised to be a potentially bullish year for crypto, particularly with Trump in office, staying the course may prove beneficial,” the company said in a Thursday broadcast message.
