Bitcoin Price Dropped Within Minutes, Millions Were Liquidated! Here’s Why

Bitcoin price fell another 2% in the last 24 hours, falling below $68,500. This decline stems from the tension in the markets before the critical FED meeting, which will be held on Wednesday and where decisions on interest rates will be announced.

Fed’s interest rate stance is key for the crypto market

The FED’s stance on interest rates significantly affects the cryptocurrency market. Although the European Central Bank and the Bank of Canada surprised the markets by cutting interest rates last week, the Fed is expected to take a more hawkish stance based on strong labor force information. This could pose a problem for Bitcoin and other speculative assets, as rising interest rates often make risky investments less attractive.

Bitcoin, which reached a record high of $73,798 in March, has been struggling to overcome new resistance levels since then. Upcoming inflation data and the Fed’s policy outlook could further sour investors’ mood, leading to higher long-term interest rates and a challenging environment for cryptocurrencies.

Analyst opinions for Bitcoin price

Analysts disagreed on Bitcoin’s future course. Willy Woo, a leading Bitcoin analyst, suggests that “miner capitulation” is currently taking place, where weaker miners are forced to sell their assets. Although Woo predicts a price recovery after this shock, he emphasizes that there must be a noticeable decrease in speculation activity in the futures markets before a significant price increase occurs.

Upcoming inflation information and the Fed’s outlook on Wednesday could strengthen concerns that interest rates will remain high for a long time and create a strong environment for speculative assets such as cryptocurrencies. Anand Gomes, co-founder of derivatives platform Paradigm, told Bloomberg:

No news is bad news in crypto. The market is like an addict who always needs bullish news to survive. So when there is no resistance, the path of least resistance is lower.

Bloodbath in the crypto market: Giant liquidations

In addition to bear market flurries, Bitcoin ETFs, which have recently experienced a wave of inflows, experienced their first net outflow on June 10, signaling a potential shift in investor mood. The overall crypto market also paints a gloomy picture today. While Ethereum (ETH) fell below $3,600, Solana (SOL), XRP, and chest coins experienced significant price declines. However, some exceptions, such as Gnosis (GNO) and Injective (INJ), have benefited by resisting the downward trend.

The ongoing selling wave has led to a wave of liquidation in the market. Experts attributed the price declines to “massive liquidations before the Fed meeting.” While the price of Bitcoin has fallen, a total of more than $93 million has been liquidated in the last 24 hours, with Bitcoin itself leading the list with liquidations of more than $14 million.