Why Bitcoin, ETH and XRP Falling Despite Fed Keeps Interest Rates Steady?
Highlights
- Bitcoin, ETH, and XRP remain under pressure despite the Fed held rates steady.
- Over $365 million in crypto liquidations occurred in 24 hours driven largely by tech stocks selloff.
- Markets now price in an 81% chance of a December Fed rate hike.
- Hot PCE inflation data expectations and monthly options expiry turn traders cautious.
Bitcoin, Ethereum (ETH), and XRP have come under pressure even after the US Federal Reserve (Fed) kept interest rates unchanged after the latest FOMC Meeting. Traders anticipate Bitcoin monthly close below $80,000 and macro headwinds will keep the broader crypto market defensive.
Bitcoin, ETH, and XRP Lead $365 Million Crypto Liquidations Today
Crypto market recorded over $365 million in liquidations across top crypto assets including Bitcoin, ETH, and XRP, according to CoinGlass data. Most liquidations occurred amid a tech stocks selloff driven by mounting skepticism over AI spending returns.
The latest Bitcoin, ETH, and XRP fall recorded nearly $210 million in long liquidations and over $150 million in short liquidations over 24 hours. More than 82K traders were liquidated in the last 24 hours, with the largest single short liquidation order of ETH-USDT worth $6.53 million happening on Binance.
In the past 24 hours, Bitcoin saw $96 million in liquidations, with the price turning volatile. ETH, SOL, XRP, ZEC, SDNK, and PUMP are among the most liquidated crypto assets.
Hawkish Stance by Fed Chair Kevin Warsh and PCE Inflation Data
The FOMC voted 10-2 to hold rates steady, with Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a 25bps rate hike. Bitcoin jumped above $81,000 after the Fed kept interest rates steady as expected.
However, a hawkish stance from Fed Chair Kevin Warsh during the FOMC press conference derailed the market’s positive mood. Warsh highlighted higher inflation, elevated oil prices due to the US-Iran war, and uncertainty about future monetary policy changes.
He declined to rule out further action, prompting traders to quickly raise the odds of a December Fed rate hike to around 81%, according to CME FedWatch data.
Bitcoin traders have turned cautious as US 10-year Treasury yield jumped slightly above 5% on Thursday, showing volatility after the Federal Reserve left interest rates unchanged. The US dollar index (DXY) climbs back towards 102.23.
Investors are now awaiting the US PCE inflation data, the Fed’s preferred inflation gauge, for further clues on the future direction of monetary policy. Economists expect Core PCE inflation MoM to climb 0.3% in September. Moreover, annual PCE inflation data is expected to come in hot at 3.6%, up from 3.4% in the previous month.
Bitcoin and Ethereum Monthly Options Expiry
Bitcoin, ETH, XRP, and the broader crypto market are falling as traders brace for monthly options expiry after October turned out bearish. BTC price has dropped almost 7% in October.
More than 135K Bitcoin options with a notional value of $10.8 billion are set to expire on Deribit derivatives crypto exchange this Friday. The put-call ratio is at 0.52, indicating bullish bias among traders and TradFi institutions.
Bitcoin max pain price is $78,000, with calls three times lower than puts at the strike price. Deribit data shows the probability of expiring above the $80,500 strike price is less than 50%.
Meanwhile, ETH options worth $0.775 billion in notional value will expire, with a put-call ratio of 0.78. The Ethereum max pain price is at $2,450, above the current market price of $2,312.
Investors tracking real-time liquidation cascades and options metrics often utilize top crypto research tools.
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