After Federal Reserve Chairman Jerome Powell sounded hawkish and downplayed market expectations for a September rate cut, the cryptocurrency market experienced significant volatility, with futures contracts experiencing a wave of liquidations exceeding $400 million.
While the Fed's latest decision to maintain interest rates unchanged met market expectations, Powell bluntly stated that a September rate cut was premature and insisted on waiting until the impact of tariffs on inflation became clearer before considering a further reduction.
Furthermore, two officials at the meeting explicitly supported a rate cut, signaling internal disagreements and further market uncertainty about future interest rate trends.
During Powell's speech, Bitcoin plummeted below $117,000, and Ethereum also retreated to $3,700, resulting in $200 million in losses across the entire network within a single hour.
According to Coinglass data, as of press time, the cryptocurrency derivatives market experienced approximately $432 million in liquidations in the past 24 hours, of which approximately $332 million came from long positions.
Matt Mena, an analyst at digital asset management firm 21Shares, stated that the market is gradually realizing that the Federal Reserve may be lagging behind in its pace of rate cuts. He noted:
Last week's Personal Consumption Expenditures (PCE) price index weakened for the second consecutive time, indicating signs of weakening consumer spending. Coupled with rising unemployment and still-elevated real interest rates, if the Fed remains tight on rates, it could lead to overtightening policy and trigger a broader economic slowdown.
Matt Mena added that the current market climate is similar to that of the fourth quarter of 2023—a period of gradually cooling inflation and rising political uncertainty, while the Fed is constrained by lagging economic indicators, resulting in slow policy adjustments.
He emphasized that the situation is now set in stone, and once the Fed initiates a rate cut cycle, Bitcoin could potentially reach $150,000 by the end of the year.
