Bitcoin fell to nearly $108,000 on Wednesday, before surging above $110,000 on Thursday after a volatile session that resulted in nearly $817 million in leveraged futures liquidations, with long traders suffering the most losses.
This decline occurred just hours after the Federal Reserve announced a widely anticipated 25-basis-point rate cut, only for Chair Jerome Powell to temper enthusiasm with cautious remarks indicating that a cut in December is not assured.
Liquidations happen when traders using borrowed funds must close their positions because their margin dips below required levels. On crypto futures exchanges, this process is automatic; when prices move sharply against a leveraged trade, the platform sells the position in the open market to cover losses.
Large clusters of long liquidations can indicate capitulation and potential short-term bottoms, while significant short liquidations may signal local tops as momentum shifts. Traders can also monitor where liquidation levels are concentrated, helping identify areas of forced activity that can serve as near-term support or resistance.
Data from CoinGlass revealed that approximately 165,000 traders were liquidated over 24 hours, including an $11 million BTCUSD long on Bybit, the largest hit of the day. Hyperliquid led all platforms with $282 million in liquidations, followed by Bybit’s $223 million and Binance’s $144 million, highlighting how overextended leverage remains in the market.
“While the Fed cut interest rates as expected, Chair Powell’s cautious remarks triggered a sharp sell-off in a ‘sell-the-news’ event after indicating that the anticipated December cut is not guaranteed,” said Nick Ruck, director at LVRG Research in a note to RialCenter.
“Though short-term volatility persists, the Fed’s shift towards ending quantitative tightening in December suggests a bullish momentum for risk assets like crypto, positioning Bitcoin and Ethereum for renewed gains as cheaper capital flows in over the coming months,” Ruck added.
Meanwhile, Jeff Mei, COO at BTSE, noted that the dip reflects “cautious positioning across all markets.”
“Inflation remains above target at 3%, and the Fed has limited options until clearer data emerges amid the government shutdown,” Mei stated. “With asset prices already elevated, further easing is unlikely unless economic weakness intensifies.”
The liquidation wave coincides with improving geopolitical sentiment after the U.S. and China showed progress toward a new trade agreement.
Despite short-term volatility, analysts suggest macro conditions are becoming more favorable. If liquidity increases in accordance with the Fed’s timeline, Bitcoin could find strong support above $115,000 by November—assuming leveraged traders don’t get overly exposed again.
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