$134M in Longs Vaporized as BTC Tumbles Below $63K Ahead of Fed Showdown
Bitcoin took a sharp turn downward on Tuesday, briefly dipping below $63,000 ahead of what experts call the summer's most event-heavy week.
The cryptocurrency had traded near $65,000 on Monday afternoon but fluctuated between $63,000 and $63,500 before hitting an intraday low of $62,684 around 9 a.m. EST.
A relief rally helped Bitcoin recover most of its losses, trading near $63,660 as of 2:37 p.m. EST, down nearly 2% for the day.
The dip brought monthly losses to 4%, dragging market capitalization down to $1.277 trillion.
In the derivatives market, Bitcoin's sharp drop triggered $134 million in leveraged long liquidations, a significant jump from Monday's $30 million. Meanwhile, nearly $22 million in short positions was liquidated, pushing Bitcoin-related liquidations past $156 million across the broader crypto market, with $515 million in long liquidations and $98 million in short.
Experts point to the upcoming Federal Open Market Committee meeting, core Personal Consumption Expenditures (PCE) price index data, and earnings reports from Wall Street giants as key factors likely to determine Bitcoin's direction. Mike McCluskey, co-founder of TX and former Fidelity executive, noted that Federal Reserve Chair Kevin Warsh's press conference will provide crucial clues for market watchers.
According to McCluskey, 'what moves markets is Warsh's press conference at 2:30 ET, specifically how he characterizes the inflation picture and whether his language leaves any door open for easing later this year.'
McCluskey added that July 30 compounds the difficulty because it coincides with second-quarter GDP, core PCE, and Bank of England rate decision all arriving. He believes a constructive scenario is GDP near the 2.3% consensus and core PCE easing from May's 3.4% year-over-year mark.
McCluskey also suggested that if either number surprises to the upside, the hawkish read from Wednesday gets reinforced rather than softened. For Bitcoin, a Fed hold decision with a dovish tone could build the $65,000 level into a genuine attempt at $68,000 to $70,000 through August.
A hike or a hold with hawkish language alongside earnings disappointments would bring the $58,000 to $60,000 range back into view quickly, McCluskey added. 'The market has been patient for six weeks. This is the week it finds out if that patience was warranted.'