Bitcoin fell to nearly $108,000 on Wednesday before zooming above $110,000 on Thursday after a volatile session that saw nearly $817 million in leveraged futures liquidations, with long traders taking the brunt of the losses.
The withdrawal came just hours after the Federal Reserve delivered a widely expected 25 basis point rate cut, only for Chairman Jerome Powell to dampen optimism with cautious comments suggesting December’s cut is not guaranteed.
Liquidations occur when traders using borrowed funds are forced to close their positions because their margin falls below the required level. On crypto futures exchanges, this process is automatic, as when prices move strongly towards a leveraged trade, the platform sells the position to the open market to cover losses.
Large clusters of long liquidations can signal capitulation and potential near-term bottoms, while heavy short wipeouts can precede local tops when momentum flips. Traders can also keep track of where liquidation levels are concentrated, helping to identify zones of forced activity that can act as short-term support or resistance.
Data from CoinGlass showed that around 165,000 traders were liquidated in 24 hours, including an $11 million BTCUSD long on Bybit, the single biggest hit of the day. Hyperliquid led all venues with $282 million in liquidations, followed by Bybit’s $223 million and Binance’s $144 million, underscoring how excessive leverage remains in the market.
“While the Fed cut interest rates as expected, Chairman Powell’s cautious press conference sparked a sharp sell-off in a ‘sell-the-news’ event after stating that the expected December cut is not guaranteed,” said Nick Ruck, director at LVRG Research in a note to CoinDesk. “
“While near-term volatility continues, the Fed’s pivot to end quantitative easing in December signals a bullish undercurrent for risk assets like crypto, positioning Bitcoin and Ethereum for renewed upside as cheaper capital flows in over the coming months,” Ruck added.
Meanwhile, Jeff Mei, COO at BTSE, said the decline reflected “cautious positioning across all markets.”
“Inflation remains above the 3% target and the Fed has limited room to maneuver until there is clearer data amid the government shutdown,” Mei said. “With asset prices already elevated, further easing is unlikely unless economic weakness becomes more pronounced.”
The wave of liquidations comes just as investors digest the improved geopolitical mood after the US and China signaled progress towards a new trade deal.
Despite short-term volatility, analysts say macro conditions are becoming more favorable. If liquidity expands in line with the Fed’s timeline, Bitcoin could find firmer footing above $115,000 into November – assuming leveraged traders don’t get caught leaning too hard again.
