Crypto Markets Rattle as $200M in Liquidations Follow Fed’s Hawkish Signals
Digital asset markets faced a sharp jolt Wednesday after Federal Reserve Chair Jerome Powell reaffirmed concerns over inflation risks, triggering more than $200 million in liquidations within an hour.
Bitcoin (BTC) fell below $116,000 as Powell delivered his remarks before recovering to around $117,000. Ether (ETH) slid 3% intraday before bouncing back to $3,750, down 0.6% on the day, while total liquidations surged across crypto derivatives markets, according to CoinGlass.
The Fed left its benchmark interest rate unchanged at 4.25%-4.5%, in line with expectations. However, Powell emphasized that recent tariff hikes are fueling price pressures. “Tariffs are pushing up prices,” he said, adding that near-term inflation expectations have ticked higher. Notably, two Fed officials dissented from the hold decision, favoring a rate cut.
Altcoins saw steeper swings. Solana (SOL), Avalanche (AVAX), and Hyperliquid (HYPE) dropped as much as 5% before retracing losses. Meme coins BONK and PENGU plunged 10% before staging a recovery.
“The Fed may be overtightening into a slowdown,” said Matt Mena of 21Shares. “Inflation is easing, consumer spending is weakening, and unemployment is creeping up. These are signs the Fed might be falling behind the curve.”
Mena likened the setup to late 2023, pointing to a soft macro backdrop and increasing political pressure. He believes the environment could favor a policy pivot later this year—potentially sending BTC as high as $150,000 by year-end.
Meanwhile, strong Q2 earnings from Meta and Microsoft lifted their shares 10% and 6% respectively in post-market trading.
