Digital asset markets experienced significant turbulence on Wednesday following Federal Reserve Chair Jerome Powell’s hawkish commentary, which sent shockwaves through leveraged trading positions. The volatility surge resulted in more than $200 million worth of liquidations within a single hour across cryptocurrency markets, according to data from CoinGlass.
Bitcoin fell beneath the $116,000 level during Powell’s remarks, though the leading cryptocurrency managed to recover above $117,000 later in the trading session. Despite the bounce-back, BTC remained down 0.8% for the day and continued trading within the lower portion of its three-week consolidation range.
Altcoins Face Steeper Initial Declines
Ethereum experienced a more pronounced selloff, dropping as much as 3% before stabilizing around $3,750, finishing the 24-hour period with a modest 0.6% decline. Alternative cryptocurrencies initially posted even sharper losses before staging their own recoveries throughout the session.
Solana, Avalanche, and Hyperliquid tokens each declined between 4% and 5% before cutting their losses, while meme coins BONK and PENGU saw dramatic 10% plunges before bouncing back. The Federal Reserve maintained current interest rates while Powell emphasized concerns about potential inflationary pressures stemming from tariffs, with two officials dissenting in favor of rate cuts.
$682.9M gone in 24h.
172,728 traders wiped out.
The market doesn’t forgive — manage your risk. 💀 pic.twitter.com/5cPc2jXCvf— Ak47♛ (@HolaItsAk47) June 22, 2025
Traditional Markets Show Strength
In contrast to crypto market weakness, traditional equity markets received a boost from strong corporate earnings. Meta and Microsoft delivered impressive quarterly results, driving their stock prices up 10% and 6% respectively in after-hours trading.
Matt Mena, an analyst at digital asset issuer 21Shares, suggested the market increasingly believes the Fed may be lagging behind economic conditions. He pointed to recent PCE data showing the second consecutive soft reading and weakening consumer spending patterns as evidence of shifting economic dynamics.
Mena drew parallels to the final quarter of 2023, noting similarities in softening inflation, rising political volatility, and a Federal Reserve constrained by lagging economic indicators. He argued that current conditions of rising unemployment and restrictive real yields create risks of policy overtightening during a broader economic slowdown, potentially setting the stage for the Fed to pivot toward lower rates and driving BTC toward $150,000 by year-end.
Bearish Sentiment Weighs on Near-Term Outlook
The combination of hawkish Fed rhetoric and significant liquidation events suggests continued pressure on cryptocurrency markets in the immediate term. Traders may remain cautious until clearer signals emerge regarding monetary policy direction and broader economic stability.
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