FOMC Risk Looms Large as Crypto Markets Face $600M in Liquidations

Crypto markets are facing a challenging period following last week's correction, which saw over $600 million in liquidations. The total crypto market cap shed more than $120 billion, dropping to $2.54 trillion, its lowest wick since mid-August.

The bigger risk for crypto comes from the FOMC meeting, with central bank watchers now overwhelmingly expecting a rate hike this week and another before the end of the year. This could put additional pressure on the market, potentially leading to further selling.

Analysts expect U.S. Treasury yields to rise while the dollar weakens, pushing capital towards safer assets and keeping liquidity away from risk assets. The weakness in the S&P 500 also suggests investors are positioning themselves for a scenario where rates increase.

The resilience of crypto markets remains a key factor, however. Despite significant selling pressure, leverage still appears relatively controlled, with speculative positioning remaining measured.