Bitcoin News Today: Bitcoin Drops Below $116K as Powell Comments Trigger $200M Crypto Liquidations

Crypto markets experienced one of the largest liquidation events in recent months as leveraged traders lost over $200 million within an hour following comments by Federal Reserve Chair Jerome Powell. The turmoil began when Powell, during a press conference, highlighted persistent inflationary risks exacerbated by rising tariffs, shifting market sentiment quickly from relief over unchanged interest rates to panic. Bitcoin briefly fell below $116,000—its lowest in nearly three weeks—before rebounding to $118,577. Ethereum similarly dipped as much as 3%, settling near $3,863 at the time of writing [1].

The market reaction was swift and severe, with leveraged positions being wiped out as traders scrambled to exit. Altcoins were not spared either; tokens such as Solana (SOL), Avalanche (AVAX), and Hyperliquid (HYPE) saw initial drops of 4–5%, while meme coins BONK and PENGU fell by 10% before partial recovery [1]. Despite these rebounds, analysts warn that continued hawkish signals from the Fed could prolong the pressure on speculative assets.

Matt Mena, an analyst at 21Shares, noted that the combination of soft inflation data and weakening consumer spending creates a “dangerous situation.” He warned that tightening monetary policy could lead to an overcorrection if economic conditions worsen. Mena also drew comparisons to the fourth quarter of 2023, when similar dynamics—soft inflation, political uncertainty, and lagging central bank responses—played out [1].

Despite the volatility, Mena expressed cautious optimism about Bitcoin’s potential. He argued that if the Fed eventually pivots toward lower interest rates, a fresh influx of capital into risk assets could push Bitcoin toward $150,000 by year-end. This scenario, however, relies heavily on continued ETF inflows, corporate Bitcoin purchases, and a broader easing of monetary policy. Any deviation from these conditions could undermine the bullish case [1].

Bitcoin’s recent range-bound behavior—trading between $116,000 and $118,000 for three weeks—has been a sign of market indecision. Meanwhile, Ethereum has struggled to break above $3,800, despite months of attempts. The performance of altcoins further highlights the uncertainty, with some assets rebounding quickly while others remain vulnerable to further corrections.

The crypto liquidation event underscores how leveraged positions are highly sensitive to macroeconomic signals. With the Fed signaling continued caution, traders remain on edge, and the path to a sustained bull run for cryptocurrencies remains conditional on central bank policy [1].

Sources:

[1] title: Crypto Liquidations Top $200M After Powell Sparks Panic Sell-Off

url: https://coinmarketcap.com/community/articles/688b70dd37e5483814e06947/