Bitcoin Plunges Below $109K: $170 Billion Crypto Wipeout Follows FOMC Shockwave

Digital asset markets reel as Federal Reserve policy decisions trigger massive liquidation.

MARKET MELTDOWN

Traders watched in horror as Bitcoin cratered through the $109,000 support level—a staggering $170 billion evaporating from cryptocurrency valuations in mere hours. The Federal Open Market Committee's latest announcement sent shockwaves through risk assets, with crypto taking the hardest hit.

FED'S POISON PILL

Powell's policymakers delivered exactly what Wall Street feared: hawkish signals that crushed speculative appetite. The timing couldn't be worse—just as institutional adoption seemed to be gaining real traction. Suddenly, those 'digital gold' narratives sound awfully quiet.

BLOOD IN THE WATER

Leveraged positions unraveled faster than a DeFi protocol audit. Liquidations stacked up like cordwood across derivatives platforms. Meanwhile, traditional finance veterans are probably sipping bourbon and muttering 'I told you so' about volatile assets.

RECALIBRATION PHASE

This isn't capitulation—it's the market digesting macroeconomic reality. Remember when bonds were boring? Now they're stealing crypto's lunch money through sheer yield dominance. The decentralized revolution continues, just with slightly lighter pockets.

FOMC hangover

Timothy Misir, head of research at BRN, described the current downturn as a “post-FOMC hangover,” while pointing out that Bitcoin price dropped to as low as $108,652 during the week.

According to Misir:

“The move flushed highly Leveraged longs and prompted a swift repricing: volatility spiked, puts were bought aggressively, and front-end skew moved materially higher.”

Notably, this price slump dipped below BTC’s short-term holder realized price of $109,700 for the first time in five months, signaling stress among recent buyers.

Ethereum mirrored the weakness, dropping to its lowest level since early August. solana fell under $200, and the total crypto market capitalization shed about $170 billion in 24 hours as risk aversion gripped investors.

CryptoQuant analyst JA Maarturn pointed out that this current sell-off represents a significant cleanup in risk-on positioning. He estimated that $11.8 billion in leveraged altcoin bets and $3.2 billion in speculative Bitcoin positions have been flushed out, effectively resetting risk appetite across the market

What next?

Despite this decline, analysts at Matrixport have argued that the derivatives markets are flashing mixed signals for crypto investors.

“Funding costs, leverage, and volumes across BTC, ETH, and SOL highlight both fragility and opportunity,” they noted, pointing to clustering signals around key on-chain thresholds that often precede major breakouts.

They added that bitcoin is nearing the apex of a symmetrical triangle, a technical formation that previously preceded decisive moves.

However, with option traders already positioning NEAR the critical $110,000 zone, any deviation from the seasonal volatility pattern, which typically ramps up in mid-October, could spark an earlier breakout or deeper correction.

They concluded:

“Emerging patterns in skew, open interest, and volatility suggest the next phase of the cycle may unfold very differently from the last.”