Bitcoin’s Record High Rally Craters as Rate Hikes Spook Crypto Markets

Just when hodlers thought we’d moon forever—Wall Street’s favorite buzzkill (the Fed) crashes the party. Bitcoin’s nosedive from its all-time high proves crypto still dances to macroeconomics’ tune.

Here’s the damage: BTC got rejected harder than a weak-handed trader after Jerome Powell’s latest ’higher for longer’ sermon. Risk assets? Getting liquidated like a 100x leverage degenerate.

Silver lining? This is crypto—nobody actually believes in ’risk-off’ for more than two news cycles. The real question: will institutions use this dip to fill their bags before the next narrative flip?

*Insert eye-roll at traditional finance’s ’this time it’s different’ mantra*

Time bomb

The Nasdaq tumbled 1.5% in just an hour shortly after the news, while the S&P 500 declined 1.3%.

"This is a ticking time bomb, swept under the rug,” said Josh Mandell, a longtime fixed-income veteran turned bitcoin analyst, prior to this afternoon’s poor bond sale.

“We used to talk about the disaster that WOULD ensue if ever there was a ‘MISSED AUCTION’ in 30-yr bonds,” Mandell said. “A missed auction means that there were not enough bids to cover the offering… Were it not for the Fed, we would be experiencing a failure to roll over bonds right now which leads to default.”

Kirill Kretov, trading automation expert at CoinPanel, said that liquidity from exchanges has been significantly removed since late 2024, "making the market thinner and more reactive," leaving bitcoin’s price vulnerable to wild swings.

"Structurally, there’s room for explosive upside," he said, but "a sharp correction can happen at any moment."

The $110,000 level has emerged as a key battleground in the current market structure, well-followed crypto trader Skew noted in an X post, describing it as the critical zone between a local high and a potential breakout point.

According to Skew, there’s a noticeable concentration of supply around this level, with Binance perpetuals showing a skewed ask-side order book and a buildup of short positions.

"All point to a huge amount of liquidity here, usually pivotal for the market," Skew said.