Over $700M in Liquidations as BTC and ETH Sink After Fed Rate Cut

The US Federal Reserve did what many anticipated and lowered the key interest rates by 25 bps earlier today.

Although such a move is typically regarded as bullish for risk-on assets like crypto, the reality is that the immediate effect has been anything but positive.

Even before the FOMC meeting, though, many expected such behavior from bitcoin. Previous examples have shown that the cryptocurrency tends to correct at first after the US central bank cuts the rates, as Merlijn The Trader pointed out.

https://twitter.com/MerlijnTrader/status/1983609782041981334?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank

Bitcoin had calmed at around $112,000 and $113,000 earlier today in anticipation of the FOMC meeting. Once Jerome Powell validated the experts’ recommendations, BTC dumped hard and plunged to just over $109,000.

BTC rebounded in the following hour and currently sits above $110,500. According to some analysts, this drop could also have been expected because of the CME gap that formed after the weekend rally and was finally filled, which could open the door for upcoming gains.

The altcoins followed suit with corrections of their own, with ETH sliding to under $3,850, XRP slipping below $2.55, and many of the lower caps marked even more significant declines.

The aftermath for now shows that the daily liquidations have rocketed to over $700 million, with over half of those taking place in the past 4 hours. The number of wrecked traders is up to more than 151,000, while the single-largest liquidated position occurred on Bybit and was worth $11 million.

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