Massive $170 Million Liquidations Impact Crypto Market Ahead of Fed Announcement

The cryptocurrency market is currently experiencing significant selling pressure, with nearly $170 million in liquidations reported. Data indicates that approximately $160.67 million of this amount is attributed to crypto liquidations, with a substantial portion—around $136 million—stemming from bullish positions.

Over the weekend, traders engaged in leveraged long positions, pushing Bitcoin close to $70,000 during Monday’s trading session. However, the market has since begun to “sell off,” as concerns mounted regarding potential asset sales by the U.S. government and the impending outcome of the Federal Reserve’s meeting.

The price of Bitcoin, along with the broader cryptocurrency market, has declined as traders reacted to indications that the U.S. government might liquidate parts of its extensive crypto holdings. Notably, a U.S. government-related wallet transferred $2 billion in Bitcoin to a new address on Monday, according to blockchain research firm Arkham Intelligence.

On Tuesday, Bitcoin fell to a low of $65,875 before recovering slightly to trade around $66,330 at the time of this reporting. Earlier in the week, the leading cryptocurrency had approached the $70,000 mark for the first time since mid-June. Most other cryptocurrencies are also experiencing losses at this time.

Investors are closely watching the outcome of the Federal Reserve’s latest policy meeting, which is anticipated to shed light on future interest rates and monetary policy. The Fed’s meeting began on Tuesday and will conclude on Wednesday, culminating in a monetary policy decision and a press conference led by Fed Chairman Jerome Powell.

While the general expectation among markets is for the central bank to maintain steady interest rates this week, many investors are hopeful for new insights regarding the future outlook for rates. Additionally, key economic data is set to be released this Tuesday, including ADP’s private payrolls report and the July jobs report, which will feature nonfarm payrolls and unemployment statistics.