- The Federal Reserve’s recent rate cut and new plan to purchase short-term treasury bills did not boost immediate market sentiment.
- Analysts such as Joe Consorti and Arthur Hayes expect Bitcoin and other risk assets to rally as the central bank shifts to quantitative easing.
- Total crypto market liquidations reached almost $500 million in one day, mostly affecting long positions in Bitcoin and Ethereum.
- Cardano (ADA) led losses among major tokens, falling about 10%, while tron (TRX) gained slightly.
The U.S. Federal Reserve cut its key interest rate by 25 basis points on Wednesday and announced plans to enhance market liquidity by buying short-term treasury bills. This policy shift did not immediately raise crypto market sentiment, with major tokens experiencing sharp declines in the hours following the announcement.
Crypto market activity saw heavy turbulence, with data from CoinGlass indicating roughly $495.65 million in liquidations over 24 hours. Of this total, approximately $369.72 million came from liquidated long positions, while $125.94 million were short positions. The majority of losses impacted leveraged traders, particularly those who had bet on price increases. In the same period, about $175 million in Bitcoin and $171 million in Ethereum trades were liquidated.
Despite the downturn, some analysts see the Federal Reserve’s new approach as a setup for a future rally in risk assets. On social media, Joe Consorti suggested that, since Bitcoin was able to surge during three years of strict monetary policy, a switch to more accommodative measures could create room for significant gains. Arthur Hayes also reportedly views the introduction of quantitative easing as positive for crypto markets.
Market sentiment varied among retail investors, according to Stocktwits data. Bitcoin sentiment was neutral, while Ethereum was more bullish. Among major alternative tokens, Cardano (ADA) suffered the greatest drop, losing nearly 10% to trade near $0.42. Solana (SOL) declined by about 4.8% to $130.65, while Ripple (XRP) and Binance Coin (BNB) dropped by 2.9% and 2.5% respectively. Dogecoin (DOGE) lost nearly 6% amid continued selling in memecoins. In contrast, Tron (TRX) bucked the trend by rising 0.4% over 24 hours.
Retail sentiment for these altcoins ranged from neutral to bearish, with varying levels of social media discussion. Overall, ongoing market pressure and liquidations followed the Federal Reserve’s rate decision, but some experts remain optimistic about a potential rebound if liquidity grows as forecasted.
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