Crypto Markets Dive Ahead of Fed Meeting

Over $340 million of long positions were liquidated in the past 24 hours.

By: Mehab Qureshi Loading...

downward arrows and diminishing bar graphs

Crypto markets continued to slide on Wednesday morning, hours before the Federal Reserve is due to release its interest rate decision.

Bitcoin (BTC) is hovering around $57,000, its lowest level since late February, after dropping 6% over the past 24 hours.

Ether (ETH) traded as low as $2,820, while Dogecoin (DOGE) slid by 8%. Solana (SOL) and Avalanche (AVAX) both suffered losses of about 7%.

ETH Price chart
ETH Price

CoinGlass reported that over $421 million in crypto futures positions were liquidated in the past 24 hours, with over $349 million of these liquidated future positions being long. Being long on an asset means betting that its price will go up, while being short on it means betting that it will go down.

Markus Thielen, CEO and head analyst of 10x Research, believes that Bitcoin may drop to $52,000. “The primary driver for the recent Bitcoin price rally was the inflow of funds into Bitcoin ETFs, which has now dried up over the past 4-5 weeks. The market internals have become weaker,” he said in a tweet on X.

Wall Street awaits Fed rate decision

Stock markets slipped on Wednesday as investors looked ahead to the Federal Reserve's rate policy decision.

Futures linked to the S&P 500 market index decreased by 0.51%, while Nasdaq 100 futures saw a drop of 0.82%. Dow Jones Industrial Average futures also experienced a decline of 0.26%.

MicroStrategy (MSTR), the biggest corporate holder of Bitcoin, saw a 5% drop. Coinbase (COIN), a major cryptocurrency exchange, experienced a 3.5% loss.

Mining stocks continue to be pummeled. Riot Platforms (RIOT) and Marathon Digital (MARA) saw their share values fall by 3.2% and 3.5%, respectively.

The U.S. central bank will release its rate policy statement at 2 p.m. Eastern Time, following which Fed Chair Jerome Powell will speak at a press conference at 2:30 p.m.

Meanwhile, the Hong Kong debut of spot Bitcoin and Ether ETFs didn't make a big splash on their first day, with a trading volume of just over $11 million.

Yet, considering the relatively smaller size of the Hong Kong ETF market compared to the U.S., ETF analyst Eric Balchunas noted that the debut was more successful than perceived."If you localize numbers, this was big," Balchunas said.