$710 Million Liquidated in Crypto Derivatives as Markets Respond to Fed Rate Cut

The cryptocurrency derivatives market experienced a massive liquidation event in the past 24 hours, with a total of $710 million in positions forcibly closed. This wave of liquidations unfolded as a reaction to the U.S. Federal Reserve’s recent rate cut announcement, which, contrary to expectations, led to broad declines in cryptocurrency prices. Long positions bore the brunt of the market turbulence, reflecting a clear imbalance in liquidation trends.

Market-Wide Liquidation Breakdown

Data from CoinGlass reveals that the total liquidations over the last 24 hours amounted to $523.24 million globally. A striking 86% of this figure, or $450.72 million, originated from long positions, leaving just $72.52 million in short position liquidations. This disparity highlights that long positions were liquidated over six times more than shorts, signifying a market bias that faced substantial resistance during this downturn.

Ethereum (ETH) Tops Liquidation Charts

Ethereum (ETH) emerged as the cryptocurrency with the highest liquidation volume. Over the past day, ETH prices dropped by 3.21%, leading to total liquidations of $137.88 million. Notably, long positions made up $132.19 million of this total, while shorts accounted for a modest $5.7 million.

Bitcoin (BTC) also faced notable liquidations, although to a lesser extent than Ethereum. Bitcoin's price declined by 0.88% in the last 24 hours, resulting in liquidations totaling $61.56 million. Long positions again dominated, comprising $50.17 million, or 81.5%, of all BTC liquidations.

Altcoins Take a Hit: Dogecoin, Solana, and XRP

Altcoins such as Dogecoin (DOGE), Solana (SOL), and XRP were not spared in the broader sell-off. DOGE, which saw its price drop by a steep 6%, recorded the third-largest liquidation volume, totaling $24.54 million. Long positions formed a staggering 96.2% of this figure, amounting to $23.61 million.

Solana (SOL) followed with $21.9 million in liquidations, while XRP experienced $16.73 million in forced position closures. Other significant liquidation volumes were observed in HYPE ($12.34 million), Binance Coin (BNB, $9.79 million), Cardano (ADA, $9.43 million), Avalanche (AVAX, $8.99 million), and SUI ($7.58 million).

Volatility Fuels Market Movements

The cryptocurrency market witnessed a surge in trading activity amid heightened volatility. Trading volumes soared by 43.05% compared to the prior day, reaching a total of $21.046 billion. However, open interest—a measure of overall outstanding derivatives contracts—experienced a slight drop of 1.95%, coming in at $22.031 billion.

A particularly notable statistic was the 318.51% spike in liquidation values, further underscoring the dramatic volatility that caught traders unprepared. The Alternative Fear & Greed Index, a sentiment gauge widely used in the crypto industry, plummeted to a score of 45, putting the market firmly in the “Fear” category. Just one day earlier, the index read 49, and it had stood at 53 a week ago. This represents a significant deterioration in market sentiment compared to last month’s optimistic “Greed” reading of 60.

Implications of the Fed’s Monetary Shift

The Federal Reserve’s recent monetary policy update has injected fresh uncertainty into an already fragile crypto market. While investors had hoped for the rate cut to provide a tailwind for asset prices, the lack of a sustained rally suggests broader concerns about risk appetite across financial markets.

The latest round of liquidations highlights ongoing vulnerabilities in the crypto space, where sentiment can reverse sharply under uncertain macroeconomic conditions. With the Federal Reserve’s policy adjustments and falling digital asset prices creating a challenging environment, traders appear to be treading cautiously. The high liquidation figures and declining Fear & Greed Index serve as stark reminders of the risks associated with crypto derivatives trading in volatile conditions.

In conclusion, the crypto market’s $710 million liquidation event underscores its highly reactive nature in the face of global monetary shifts. As sentiment continues to sour, market participants must remain vigilant in navigating the evolving terrain of digital assets.