Bitcoin fell to near $108,000 on Wednesday, before climbing above $110,000 on Thursday after a volatile session that saw nearly $817 million in leveraged futures liquidations, with long traders taking the bulk of the losses.
The pullback came just hours after the Federal Reserve announced a widely expected 25 basis point rate cut, but Chairman Jerome Powell tempered optimism with cautious comments suggesting the December cut is not guaranteed.
Liquidations occur when traders using borrowed funds are forced to close their positions because their margin falls below required levels. On crypto futures exchanges, this process is automatic, because when prices move sharply relative to a leveraged trade, the platform sells the position on the open market to cover losses.
Large groups of long liquidations can signal capitulation and potential short-term bottoms, while large short-term wipeouts can precede local tops as momentum reverses. Traders can also track where liquidation levels are concentrated, helping to identify areas of forced activity that may act as short-term support or resistance.
Data from CoinGlass showed that around 165,000 traders were liquidated in 24 hours, including an $11 million long BTCUSD position on Bybit, the biggest hit of the day. Hyperliquide leads all sites with $282 million in liquidations, followed by Bybit’s $223 million and Binance’s $144 million, highlighting how excessive leverage remains in the market.
“While the Fed cut interest rates as planned, Chairman Powell’s cautious press conference triggered heavy selling in a ‘news sell’ event after he said the planned December cut was not guaranteed,” said Nick Ruck, director of LVRG Research in a note to CoinDesk. “
“As short-term volatility persists, the Fed’s pivot to end quantitative tightening in December signals a bullish undercurrent for risk assets like crypto, positioning Bitcoin and Ethereum for further upside as cheaper capital flows in over the coming months,” Ruck added.
Meanwhile, Jeff Mei, COO at BTSE, said the decline reflected “cautious positioning across all markets”.
“Inflation remains above the 3% target and the Fed has limited room to maneuver until there is clearer data against the backdrop of the government shutdown,” Mei said. “With asset prices already high, further easing is unlikely unless economic weakness becomes more pronounced.”
The wave of selloffs comes just as investors digest improving geopolitical sentiment after the United States and China reported progress toward a new trade deal.
Despite the short-term volatility, analysts say macroeconomic conditions are becoming more favorable. If liquidity increases in line with the Fed’s schedule, Bitcoin could find firmer footing above $115,000 in November – assuming leveraged traders don’t find themselves over-leaning again.
