Fed Rate Hike Sparks $117 Million in Crypto Liquidations
The Federal Reserve raised interest rates by 25 basis points to 3.75%-4.00% on Wednesday, prompting a significant reaction in the crypto market.
In the first hour after the announcement, $117.35 million was liquidated from derivatives markets, with shorts accounting for $90.16 million and longs making up $27.19 million of this total.
This marked a 77% increase in short liquidations compared to other types of liquidation, indicating that traders were closing bearish bets rather than investing fresh capital into the market.
The Fed's rate projections also remain a concern for crypto investors, with officials raising their median projection for the federal funds rate to 4.25% by the end of 2026 and implying another quarter-point increase after this week's move.