Key Points:
- Crypto market fell about 1.1% with $342 million liquidated.
- Bitcoin and Ethereum slipped below key levels as retail sentiment turned extremely bearish.
- Fed held rates at 3.50% to 3.75%, and Powell noted solid economic activity.
- Gold and silver rallied to fresh highs as investors sought safe havens.
Cryptocurrency markets weakened on Wednesday after the Federal Reserve left interest rates unchanged, triggering a wave of long liquidations across major tokens. Bitcoin and Ethereum both slipped, while leveraged traders absorbed heavy losses.
At the same time, precious metals surged, with gold and silver pushing to fresh record levels as investors rotated toward traditional safe-haven assets.
Fed Pause Triggers Risk Repricing
The Federal Reserve kept its benchmark lending rate between 3.50% and 3.75%. Jerome Powell, the Federal Reserve chair, reported that the U.S. economy continues to expand at a strong rate. According to Powell, the current economic situation shows better employment and inflation management than in previous periods.
While stable rates can reduce policy-driven volatility, they can also encourage investors to rebalance risk. In this case, traders appeared to rotate capital into conventional assets, such as gold, while trimming exposure to more speculative markets, including cryptocurrencies.
Long Liquidations Pressure Bitcoin and Ethereum
Data from CoinGlass shows that the pullback was driven largely by long position liquidations rather than broad-based panic selling.
Over the past 24 hours, 117,330 traders were liquidated, totaling $342.79 million. Long positions accounted for roughly $232 million of those losses. Bitcoin-linked liquidations accounted for $136.11 million, while Ethereum liquidations totaled $51.64 million.
Bitcoin price fell 1.3% on the day to $87,800, and retail sentiment on Stocktwits slid into “extremely bearish” territory, reflecting growing caution among smaller traders.
Ethereum price also declined 1.4% to $2,960, slipping below the psychologically important $3,000 level. Traders had previously viewed $3,000 as a potential base for a push toward $3,200, but that scenario now looks less likely in the near term amid persistent selling pressure.
At the same time, Solana was the largest decliner among the top 10, down 2.8% to $123.32. XRP, Cardano, and Dogecoin also posted losses of 1.2%, 1.6%, and 1.8%, respectively.
Why Gold and Silver Rallied While Crypto Weakened
Precious metals moved in the opposite direction from crypto. Gold jumped 4.69% and added $249 today, hitting a new record above $5,530, while silver touched an intraday high near $119 per ounce before settling around $117, recording 59% surge in the last 30 days alone.
Demand also showed up in exchange-traded products. SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) both traded higher, supported by strong inflows and elevated retail interest.
The divergence highlights a classic risk-off response. As leveraged crypto positions unwind, volatility rises, prompting investors to seek assets viewed as more stable stores of value.
In the near term, markets are likely to remain choppy as traders reassess their positions in response to macroeconomic data and Federal Reserve guidance. While expectations of eventual easing could support risk assets over time, continued liquidation pressure and cautious sentiment suggest cryptocurrencies may face further downside before finding a firmer footing.
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