After Fed Chairman Jerome Powell's hawkish messages while keeping interest rates steady, the price of Bitcoin sharply fell to $115,800, with approximately $200 million in positions liquidated in the crypto markets.
Fed Chairman Jerome Powell expressed in strong terms after the Wednesday meeting that the additional tariffs imposed by U.S. President Trump pose a risk of raising inflation. Powell emphasized that short-term inflation expectations have increased, stating, 'The increase in tariffs is pushing prices up. We can say that the Fed is currently showing tolerance against inflation pressure by not raising interest rates.'
Powell's statements created sudden panic in the markets. During the statement, the price of Bitcoin (BTC) lost about 2% in value, quickly dropping from $118,000 to $115,800. The decline in altcoins was even sharper. Prices of Ethereum (ETH), Solana (SOL), and XRP also dropped by about 4%, experiencing significant losses.
Liquidations Were Severe
Following Powell's hawkish statements, there were intense liquidations of highly leveraged positions in the market. According to CoinGlass data, a total of $200 million in positions were liquidated in cryptocurrencies. Investors who made highly leveraged trades in Bitcoin futures markets suffered significant losses.
Following these developments, the market received the message that Powell's stance was clear and that he would not bow to the interest rate cut pressures from President Trump. Fed members Christopher Waller and Michelle Bowman supported Trump's stance by putting a dissenting note on interest rate cuts, but Powell did not back down on this issue.
Crypto Markets Compensated for Losses
After the sharp decline and wave of liquidations, cryptocurrencies rebounded to recover their losses. Bitcoin rose again to $118,400, while Ethereum returned to the $3,870 level. The markets are now focused on July inflation data and are in search of new direction. Experts suggest that discussions about the Fed's independence are deepening.