$565M Liquidated in 24 Hours as Bitcoin Drops Below $76K

• Long positions accounted for $370 million of the $565 million in crypto liquidations on Wednesday.
• Fed dropped somewhat elevated inflation language, replacing it with a starker elevated warning.
• Brent crude hit $119.50 per barrel as Trump rejected the Iran deal, and strike plan was confirmed.

Crypto markets took a hit on Wednesday as a cascade of macro developments sent risk appetite into retreat. Bitcoin fell to $75,472, down 2.30% in 24 hours. Ethereum dropped to $2,240, off 3.69%. XRP slipped to $1.36, down 2.26%. The total crypto market cap shed 2.06% to $2.53 trillion as $565 million in leveraged positions were liquidated across the market in a single day.

Long positions accounted for $370 million of the liquidations, meaning traders betting on further upside were the primary casualties. Short positions contributed $195 million, suggesting some bears also misjudged the speed and direction of the move.

Three Events Hit at Once

Wednesday’s selloff was not driven by any single event. Three separate macro shocks arrived in close succession and compounded each other.

The Federal Reserve held interest rates unchanged in Jerome Powell’s final meeting as chair, but the language accompanying the decision was the real market mover. The Fed dropped its previous characterization of inflation as “somewhat elevated” and replaced it with a starker assessment: “Inflation is elevated.” 

That single word change signals rate cuts are further away than markets had hoped, reducing the liquidity conditions that have historically supported risk assets.

Simultaneously, Brent crude oil surged to around $119.50 per barrel, its highest level since 2022 and the peak of the Iran War. The International Energy Agency called the situation the biggest energy security threat in history. 

President Trump rejected Iran’s proposal to reopen the Strait of Hormuz, and US Central Command confirmed preparations for a wave of strikes targeting Iranian infrastructure.

Where Key Assets Stand

Bitcoin is holding above $75,000, but the psychological $76,000 level has been lost. Ethereum is trading near $2,240. Solana has fallen to $82.44, down 2.81% on the day. Dogecoin is down 3.36%. The Fear and Greed Index sits at 39, in fear territory, reflecting a market that is careful rather than panicked but watching the Iran situation and oil prices closely for the next directional signal.

With Powell’s era at the Fed now officially over and a new chair taking the seat amid surging energy prices and an active military confrontation in the Middle East, the macro backdrop for crypto heading into May is more complicated than it appeared just one week ago.

Related: Jerome Powell Delivers Likely Last Speech, Rates Unchanged