The crypto market is reeling from a massive sell-off as Bitcoin and other major cryptocurrencies experience significant losses. Over the past 24 hours, a total of 361,972 traders were liquidated, leading to over $1.17 billion in losses. Bitcoin’s price has dropped by 7%, touching lows of $95,500 after reaching an all-time high of $108,268 just days ago. The latest dip represents a 12% decline in Bitcoin’s value over the last few days.

Liquidation Impact: $1.17 Billion Lost

The bulk of the losses were in the derivatives market, where traders had positioned themselves to benefit from Bitcoin’s continued rise. However, the market turned bearish, leaving many long positions liquidated. Of the $1.17 billion liquidated, $1.02 billion came from long traders betting on Bitcoin’s price increase, while short traders faced much smaller losses, totaling $143.3 million.

Among the hardest-hit assets was Bitcoin, with $238.76 million in liquidations. Ethereum, which had been performing strongly, also saw $220 million wiped out. The biggest individual liquidation came from an Ethereum trader on Binance, who lost a staggering $15.8 million when the price of Ethereum crashed to $3,432. Ethereum’s price continued to fall, reaching $3,330, causing even more liquidations.

Dogecoin traders weren’t spared either, with liquidations reaching $56.53 million, followed by XRP at $47 million and Solana with $38.53 million in losses.

A Bull Trap or a Bearish Trend?

The market experienced a brief rally following a flash crash last week when Bitcoin plummeted to $94,000. Many traders saw this as an opportunity and entered long positions, expecting Bitcoin to rebound, which it did—briefly—before setting a new all-time high above $108K. This sudden surge led to a false sense of confidence, luring traders into what turned out to be a “bull trap.”

Now, with Bitcoin dipping once again, those who entered the market expecting another upward movement have been caught off-guard, incurring significant losses. Experts suggest that the recent price swings and liquidations are part of the ongoing volatility in the crypto market, exacerbated by macroeconomic factors, particularly the policies of the U.S. Federal Reserve.

Fed’s Hawkish Stance Contributing to Market Decline

The sharp price movements in Bitcoin and other cryptocurrencies are partly attributed to the hawkish comments made by U.S. Federal Reserve Chair Jerome Powell during the latest Federal Open Market Committee (FOMC) meeting. Powell warned that the central bank may not lower interest rates as aggressively as expected in 2025 due to persistent inflation concerns. This stance has sent shockwaves through risk markets, including crypto, with many investors fearing that tighter monetary policies will continue to strain liquidity and affect the performance of risk assets like Bitcoin.

The combination of price volatility, trader liquidations, and broader economic uncertainty has caused the crypto market to feel the full brunt of a correction. While Bitcoin and other altcoins have historically rebounded from similar setbacks, the current market dynamics, fueled by macroeconomic policies, suggest that further volatility may lie ahead.

Conclusion

The latest downturn in Bitcoin’s price has once again highlighted the risks of trading in the crypto market, where volatility and liquidation risks remain high. With over $1 billion lost in a single day, traders are feeling the sting of a market correction. As the market watches for a potential rebound, the effects of macroeconomic factors like U.S. Federal Reserve policies are continuing to add pressure, making it unclear whether a full recovery is imminent or if further declines are on the horizon.