Crypto Bulls Rekt: $200M Liquidation Tsunami After Powell’s Fed Shockwave

Jerome Powell just dropped a Fed-sized anvil on crypto's bull run—and the leverage rats are scrambling.

Liquidation bloodbath hits $200M

The Fed chair's hawkish pivot vaporized longs faster than a meme coin rug pull. BTC whales saw their positions liquidated at a rate not seen since the 2024 halving frenzy.

Market PTSD triggers flash crash

Traders got PTSD flashbacks when Powell muttered 'inflation' three times fast—like some macroeconomic Bloody Mary. Alts got hit hardest, with perpetual swaps imploding across mid-cap tokens.

Silver lining? The forced deleveraging might've saved us from another Luna-level catastrophe. Or as Wall Street would say: 'It's a healthy correction' (while quietly shorting retail).

The central bank left interest rates unchanged, with Powell insisting on potential inflationary pressures from tariffs, while two officials dissented in favor of cutting.

Later in the session, BTC bounced back above $117,000, still 0.8% down through the day and trading at the lower end of its three-week tight range. Ether (ETH) slid as much as 3%, then recovered to $3,750, modestly lower (-0.6%) over the past 24 hours.

Altcoins posted steeper declines first, but quickly rebounded. Solana’s SOL (SOL), Avalanche’s AVAX (AVAX) and Hyperliquid’s HYPE tokens were down 4%-5% before paring losses, while BONK and PENGU plunged 10% each before bouncing back.

A check on the traditional market saw Meta (META) and Microsoft (MSFT) posting strong quarterly earnings, lifting the stocks 10% and 6% higher, respectively, after regular trading hours.

"The market is increasingly starting to think the Fed may be behind the curve," Matt Mena, analyst at digital asset issuer 21Shares, said in a market note.

"Last week’s PCE print marked the second soft reading in a row, and consumer spending is weakening," he wrote. "With unemployment edging higher and real yields still restrictive, maintaining such tight policy risks overtightening into a broader slowdown."

The current setup is reminiscent of the last quarter of 2023, Mena said, with "softening inflation, rising political volatility, and a Fed constrained by lagging indicators."

He said "the stage is set" for the Fed to pivot to lower rates, which could drive BTC to $150,000 by year-end.