Major Altcoins Decline as $520M in Crypto and Long Positions Are Liquidated

The recent surge in digital assets may be cooling off, as major cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin, have experienced significant price corrections, leading to substantial liquidations across the market. Following Donald Trump's election victory, the crypto market saw strong upward momentum, with Bitcoin reaching new highs. However, that rally now appears to be under pressure.

Bitcoin Retreats After Reaching New All-Time High

After touching a new all-time high of $93,000 on Wednesday, Bitcoin sharply reversed course, dropping to $87,805—down more than 6% in the past 24 hours. The sudden decline triggered a cascade of liquidations for long positions, signaling heightened volatility in the market.
 

Ethereum Follows with a Sharper Decline

Ethereum's price drop was even steeper, with an 8% decline over the same 24-hour period. Ethereum currently trades at $3,083, underscoring the heightened sensitivity of the broader crypto market to Bitcoin’s price moves.

Federal Reserve Policy Signals Add to Market Tension

The correction comes just ahead of an anticipated speech by Federal Reserve Chair Jerome Powell, who is expected to outline potential shifts in monetary policy. This adds further uncertainty to both traditional and digital asset markets, as investors brace for potential impacts on liquidity and risk sentiment. U.S. stock indices also traded slightly lower, indicating a cautious market environment.

Image explanations: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual participant's judgment of the midpoint of the appropriate target range for the federal funds rate or the appropriate target level for the federal funds rate at the end of the specified calendar year or over the longer run. One participant did not submit longer-run projections for the federal funds rate.

Liquidations Pile Up as Long Positions are Wiped Out

The price dip in leading cryptocurrencies has led to widespread liquidations. According to data, approximately $617 million in cryptocurrency positions were liquidated in the past 24 hours, with long positions making up a significant portion—$444 million. Bitcoin led the liquidation tally, with around $179 million wiped out, including $135 million in long positions.

Market Outlook Following Trump’s Crypto-Friendly Promises

Despite this pullback, cryptocurrencies remain significantly higher since Trump's election victory, with the President-elect touting ambitious pro-crypto plans. Trump has pledged that future Bitcoin mining will be U.S.-based and hinted at turning the country into a global "crypto capital." This optimism has fueled gains, but the recent correction underscores the market’s sensitivity to economic and policy signals.

As the market continues to digest Federal Reserve policies and macroeconomic conditions, the long-term outlook for major cryptocurrencies remains uncertain but is buoyed by the potential for regulatory support under the incoming administration. The current correction serves as a reminder of the volatility and risk inherent in the crypto market, particularly for leveraged positions.