Crypto markets staged a classic sell-the-news reversal overnight after the U.S. Federal Reserve delivered a quarter-point rate cut but warned a December cut isn’t guaranteed. Bitcoin (BTC) briefly sank to the $108,000 area before clawing back above $110,000, while leveraged traders absorbed roughly $817 million in futures liquidations over 24 hours—most of them longs.
The immediate trigger came from Washington, not the blockchain. The Fed lowered its policy rate by 25 basis points to a 3.75%–4.00% range, but Chair Jerome Powell stressed that another move this year is “not a foregone conclusion.” He also confirmed the central bank will stop shrinking its balance sheet on December 1, citing money-market strains—details that left traders recalibrating risk quickly across stocks, bonds, and crypto.
What moved first: the macros
This wasn’t the euphoric “pivot” many risk-asset bulls hoped for. Powell emphasized divided views on the committee and said limited government data (amid a shutdown) argues for caution—comments that knocked back odds of a December cut and took the shine off the initial move. Markets tend to dislike ambiguity, and crypto—where leverage amplifies every twitch—felt it fastest.
In a notable shift with liquidity implications, the Fed will end quantitative tightening next month by reinvesting maturing Treasuries and redirecting MBS paydowns into bills. That step, paired with a cut, would usually be supportive for risk over time, but the day-one message to traders was simple: the path ahead is data-dependent and bumpy.
The crypto tape: liquidations, then a rebound
In the hours after the decision and press conference, BTC fell to nearly $108K before rebounding above $110K today. Data compiled by CoinDesk from analytics firm CoinGlass showed around 165,000 traders liquidated in 24 hours, including the day’s largest single hit—an $11 million BTC long on Bybit. Hyperliquid led venues with about $282 million in liquidations, followed by Bybit at $223 million and Binance at $144 million—a clean snapshot of just how stretched positioning had become.
This is the mechanics behind the headlines: liquidations happen when a highly leveraged position moves against the trader and the exchange force-closes it to cover losses. When enough of these cluster in one direction—last night, on the long side—they can cascade through order books, deepen the drop, then leave a cleaner slate for prices to rebound. It’s messy, but common in crypto’s derivatives-heavy market.
Altcoins didn’t escape. ETH, SOL, XRP, and DOGE swung in sympathy, with short-term charts dominated by derivatives flows and cross-venue deleveraging rather than fresh fundamental narratives. That’s typical on macro days: beta coins follow bitcoin price and crypto market news more than their own roadmaps when volatility spikes.
Why the “sell-the-news” label fits
Leading into the meeting, traders had leaned into a familiar bullish script—rate cut = easier financial conditions = higher risk-asset prices. When Powell downplayed the odds of a December encore and flagged uncertainty, crypto saw the kind of sell-the-news reversal that often follows “as expected” events with hawkish color. Reuters summed up the turn neatly: the cut landed, but “a further reduction in December is not a foregone conclusion,” and markets dialed back bets accordingly.
There’s also a plumbing angle. The Fed ending balance-sheet runoff can eventually loosen liquidity in the financial system—historically a tailwind for speculative assets—but the effect isn’t instantaneous. Traders care about today’s positioning and tomorrow’s catalyst path; Powell’s “go-slow” tone kept both uncertain.
One more accelerant: options and dealer flows
Today’s bounce back above $110K also sits in the shadow of Friday’s options expiry. Dealer positioning around key strikes can increase volatility, and CoinDesk flagged roughly $13 billion in BTC options set to roll off, with dealers in negative gamma around the $100K–$111K zone. Translation: hedging flows can amplify intraday swings near those levels, independent of headlines. That’s gasoline on the macro spark.
Conclusion
The tape delivered a reminder that exchange crypto markets live at the intersection of macro and leverage. A small policy surprise can ripple through crypto derivatives, trigger outsized bitcoin liquidation waves, and reset the board in hours. For now, BTC’s quick rebound suggests the market didn’t lose its broader uptrend—but it did lose some excess leverage, which is often healthy.
If the Fed’s balance-sheet pivot steadily adds liquidity and the economy cooperates, risk assets could find steadier footing into November. But with Powell explicitly telling markets not to bank on a December cut, expect more two-way action than one-way euphoria. Crypto market news will stay macro-driven until the next clear catalyst arrives.