Bitcoin Dives Below $100K, $700M Wiped from Crypto Longs; XRP Plummets 5%

Bitcoin Dips Below $100K as $700M in Crypto Longs Are Liquidated, XRP and DOGE Hit Hard

Bitcoin (BTC) dropped below the $100,000 mark late on Wednesday, triggering a massive wave of liquidations across the crypto futures market. XRP and Dogecoin (DOGE) saw an unusually high $70 million in liquidations, reflecting heightened speculative activity around major altcoins.

The downturn followed Federal Reserve Chair Jerome Powell’s comments during a press conference, where he addressed the central bank’s stance on cryptocurrency. Powell stated that the Federal Reserve is legally barred from holding Bitcoin as part of its reserves, dampening the speculative optimism that had been fueling crypto markets. Powell’s remarks came in response to a question about President-elect Donald Trump’s suggestion of creating a U.S. Bitcoin reserve.

“We cannot own Bitcoin under the Federal Reserve Act, and we are not seeking any change in that law,” Powell clarified, responding to Trump’s proposal to hold a portion of the U.S. government’s Bitcoin holdings.

Bitcoin fell 3% following Powell’s statement, leading to sharp declines in other major cryptocurrencies. XRP, DOGE, and Solana (SOL) each dropped by more than 5%, while Ethereum (ETH) and Binance Coin (BNB) lost around 2.5%. Chainlink (LINK) saw the biggest decline, plummeting by 10% after a brief rally earlier in the week.

The market’s downturn resulted in over $700 million in liquidations, with altcoin and meme coin futures experiencing more significant losses than BTC or ETH futures. This unusual trend suggests that leveraged positions in altcoins and speculative assets may be facing higher volatility.

The selloff could indicate a turning point in market sentiment, with analysts speculating that the price reversal may have been overdone. Some believe Powell’s comments could mark a local top, reducing expectations of a continued rally in the short term.

“Crypto markets may have hit a peak now that a U.S. Bitcoin reserve is off the table. This promise was a key narrative driving the rally in recent months, and Powell’s comments suggest a bearish shift,” Nick Ruck of LVRG Research commented.

Despite the recent dip, some traders remain optimistic about the broader outlook for crypto. QCP Capital, a trading firm based in Singapore, maintained its bullish stance for the year ahead.

“While short-term volatility may occur, we believe 2025 holds great potential for the crypto market, particularly with Trump’s pro-crypto policies. Investors should remain steady and avoid being shaken out of their positions,” the firm advised in a recent market update.

As the dust settles from the latest market moves, all eyes will be on future developments in both the regulatory and macroeconomic landscapes to gauge whether the downturn is a temporary correction or a deeper trend.

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