Bitcoin and Ethereum Under Pressure as Hawkish Fed Remarks Trigger Massive Liquidations

The cryptocurrency market faced significant turbulence following hawkish comments from Jerome Powell, Chair of the U.S. Federal Reserve, during the October Federal Open Market Committee (FOMC) meeting. His remarks dashed expectations for a December rate cut, igniting widespread volatility in digital asset derivatives. Bitcoin (BTC) prices dropped sharply to the low $11,000 range, sparking liquidations of long positions that totaled $450 million, a marked increase from the previous day's $396.4 million.

Surge in Long Position Liquidations Dominates Market Movements

Data from Coinglass revealed that as of October 30, total liquidations over the preceding 24 hours reached $591.98 million (approximately 830.4 billion KRW), reflecting a 0.74% uptick compared to the previous day. Long positions accounted for a staggering $456.61 million (640.5 billion KRW), equivalent to 77% of total liquidations, while short positions contributed $135.37 million (189.9 billion KRW).

Bitcoin led the liquidation wave, with approximately $231.72 million (325.2 billion KRW) in BTC positions liquidated—comprising 39.14% of the total. BTC prices dropped 2.04% compared to their prior-day levels, with long liquidations ($190.90 million, 271.3 billion KRW) far exceeding short liquidations ($40.83 million, 58 billion KRW).

Ethereum (ETH) ranked as the second-most affected asset in liquidation volumes. ETH liquidations totaled $160.35 million (225.3 billion KRW), with long positions accounting for $127.91 million (181.8 billion KRW) and short positions at $32.43 million (46.1 billion KRW). Other major assets such as Solana (SOL) and HyperLiquid (HYPE) also experienced significant liquidations, predominantly stemming from long positions.

Accumulated Liquidation Zones Amplify Price Pressure

Amid these elevated liquidation volumes, bearish sentiment continues to grip the market. Data from liquidity maps show that long liquidation positions are heavily concentrated in the low $11,000 range for Bitcoin. If BTC dips below this critical support zone, a cascading sequence of liquidations could intensify downward pressure on prices.

Conversely, short liquidation zones are clustered between $11,200 and $11,400, creating key resistance levels for any potential recovery. While a decisive price rally above $11,400 could alter the prevailing market dynamics, the current structure suggests that any minor declines are likely to accelerate the bearish trend. This asymmetrical risk landscape leans toward continued market weakness unless strong buying momentum emerges.

Sentiment and Volume Indicate Prolonged Market Uncertainty

Various market indicators point toward cautious investor sentiment. The Fear and Greed Index has dropped to 39, solidly within the "fear" range, while the Relative Strength Index (RSI) sits near oversold territory at 43.7. Over the last 24 hours, trading volume experienced a modest rise of 2.04% to reach $341.5 billion (478 trillion KRW). Meanwhile, open interest (OI) crept up by 0.86% to $163.9 billion (229 trillion KRW), signaling limited appetite for new positions even as liquidation volumes remain elevated.

The sluggish movement in open interest suggests that liquidated investors remain hesitant to reinvest, underscoring a risk-averse attitude that may persist in the near term.

Will Bitcoin Manage a Short-Term Rebound?

Analysts remain cautiously skeptical regarding Bitcoin’s immediate prospects for recovery. One expert commented, “BTC is attempting to build buying momentum around the $11,000 level, but the accumulation of nearby long liquidation zones leaves it highly vulnerable to further decline. Breaking through resistance between $11,200 and $11,300 will be pivotal for any trend reversal, but success is far from guaranteed.”

The expert’s insights align with the broader sentiment, which emphasizes the crucial role of technical resistance levels in shaping Bitcoin’s short-term trajectory. Without robust market momentum, sustained upward movement remains improbable.

U.S. Monetary Policy and Its Impacts on Crypto Markets

Adding to the uncertainty is the Federal Reserve’s stance on interest rate policy. During the October FOMC meeting, Powell announced a 25 basis point rate cut, marking the Fed’s second consecutive rate cut this year. However, his remarks tempered expectations for further reductions. “A December rate cut is not assured,” Powell stated, referencing significant disagreements within the committee surrounding future monetary policy decisions.

The Federal Reserve’s caution highlights growing unpredictability in the U.S. economic outlook, exacerbating volatility across both traditional and digital markets. As traders navigate these macroeconomic challenges, crypto markets are likely to remain highly sensitive to policy shifts.

Key Takeaways for Investors

The recent liquidation frenzy underscores the importance of monitoring technical support and resistance levels, particularly in the volatile crypto market. Bitcoin’s low $11,000 zone remains critical, with dense liquidation clusters threatening further downward moves. Similarly, Ethereum and other leading assets face comparable pressures, underscoring bearish risks across the board.

In light of Powell’s hawkish commentary and heightened regulatory uncertainty, investors may opt for more conservative strategies as the year-end approaches. At least for now, broader sentiment and market signals suggest that the road to recovery for Bitcoin and Ethereum remains fraught with challenges.