Crypto Traders Take on $800M Liquidations as Fed’s Caution Sparks ‘Sell-the-News’ Reversal
A sharp, Fed-driven risk reset on Thursday triggered heavy crypto liquidations, sending Bitcoin briefly down to nearly $108,000 before recovering above $110,000. Futures markets saw around $817 million in leveraged positions wiped out, mostly from overextended longs, as traders reacted to shifting macro sentiment across global assets.
The sell-off followed the U.S. Federal Reserve’s quarter-point rate cut and Chair Jerome Powell’s cautious remarks that another reduction in December is “not guaranteed.” His comments cooled expectations for a steady easing cycle, prompting a quick reversal in risk assets. Crypto markets, which had rallied on hopes of prolonged monetary support, were particularly hit as investors reassessed the pace and sustainability of policy loosening.
Market move in focus
Bitcoin’s intraday drop and snapback reflected a classic “sell-the-news” pattern as policy guidance, not the cut itself, set the tone. Broader crypto majors echoed the swing, with price checks around the $109K–$111K band during Asia/Europe hours. Barron’s+1
Why crypto liquidations after Fed rate cut spiked
CoinGlass data pointed to roughly 165,000 accounts liquidated over 24 hours. The largest single forced exit was an ~$11 million BTCUSD long on Bybit, while venue-level tallies showed Hyperliquid (~$282M) ahead of Bybit (~$223M) and Binance (~$144M), underscoring elevated leverage and crowded positioning.
What crypto liquidations after Fed rate cut mean for traders
Large clusters of long liquidations can mark capitulation and short-term bottoms; heavy short wipeouts often precede local tops as momentum flips. Mapping where liquidation levels cluster helps identify pockets of forced activity that may act as near-term support/resistance. CoinGlass’ heatmaps and venue dashboards remain key tools for monitoring these bands.
Policy signal: cut now, caution on December
The FOMC delivered 25 bps and flagged uncertainty around the outlook. Powell emphasized that another move in December is not assured. Some desks noted communication around winding down quantitative tightening into year-end, adding nuance to the liquidity backdrop traders are watching.
Context & Analysis
Fed messaging, not the 25 bps cut, drove the de-risking impulse. If QT winds down into December and liquidity expands, that could underpin crypto into November assuming leverage resets. Near term, watch whether BTC bases above ~$110K and if liquidation clusters migrate higher; both would signal improving risk tolerance.
Conclusion
Bitcoin remains choppy in the short term following the Fed’s rate move, but recent liquidations may have reset overheated positioning. With leverage now lighter, market conditions could stabilize if traders avoid aggressive re-risking.
Looking ahead, a potential year-end liquidity boost may offer support to BTC prices. However, sustained recovery will depend on how funding rates, open interest, and liquidation clusters evolve through November. Traders are closely watching these metrics to gauge whether the market can transition from volatility-driven swings to a steadier consolidation phase in the weeks ahead.
FAQs
Q : What caused the ‘sell-the-news’ move?
A : Powell said a December cut isn’t guaranteed, softening the impact of the 25 bps reduction.
Q : How much was liquidated?
A : About $817M in 24 hours, mostly long positions, per CoinDesk citing CoinGlass.
Q : Which venues saw the most liquidations?
A : Hyperliquid (~$282M), Bybit (~$223M), and Binance (~$144M).
Q : Did Bitcoin drop below $109K?
A : Yes, it neared $108K before rebounding above $110K.
Q : How do liquidation clusters affect price levels?
A : They often create short-term support or resistance where forced activity concentrates.
Q : Where can I monitor liquidation risk?
A : CoinGlass’ liquidation dashboard and heatmaps.
Q : Do crypto liquidations after the Fed rate cut imply a trend change?
A : Not necessarily; they represent a positioning reset. The broader trend depends on liquidity, open interest, and the policy path.
Facts
Event
Volatility and ~$817M leveraged crypto liquidations following Fed’s 25 bps cutDate/Time
2025-10-30T11:27:00+05:00Entities
Bitcoin (BTC); U.S. Federal Reserve; Jerome Powell; Hyperliquid; Bybit; Binance; CoinGlassFigures
~$817M liquidations (24h); BTC ~$108K low to >$110K; ~165,000 traders liquidated; largest single Bybit BTCUSD long ~$11M (USD) CoinDeskQuotes
Sources
CoinDesk (news) + Reuters (Fed) + CoinGlass (data)