Crypto Liquidations Exceed $940M After Fed Chair Speech
Crypto liquidations soared past $940 million in 24 hours after Fed Chair Jerome Powell’s Jackson Hole speech hinted at future rate cuts. According to CoinGlass data, liquidations were dominated by long positions, accounting for $826.5 million of the total $941 million. Bitcoin liquidations alone reached $277.2 million as BTC briefly dipped below $110,000, contributing nearly 30% of the overall crypto liquidations. This sell-off wiped around $200 billion off the crypto market cap, which fell from $4 trillion to $3.8 trillion. Ethereum also suffered, with ETH positions liquidated amid a 4.9% price drop to about $4,400. The mass crypto liquidations reflect heightened market volatility and over-leverage. Traders had driven Bitcoin to a weekly high of $116,960 following Powell’s dovish remarks, but the rally quickly reversed. Such large-scale liquidations often trigger cascading sell-offs, underscoring risks in a highly leveraged environment and signaling potential for further price swings.
Bearish
This event is bearish for the market because over $940 million in crypto liquidations—dominated by long positions—indicates extreme volatility and an over-leveraged trader base. The swift reversal after Powell’s dovish Jackson Hole speech led to cascading liquidations, reminiscent of past sell-offs when speculative rallies proved unsustainable. In the short term, such large-scale liquidations can drive prices lower due to forced position closures. In the long term, they may prompt traders to reduce leverage and adopt more cautious strategies, potentially dampening bullish momentum until market stability is restored.