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20/03/25
22
Crypto Caution: Traders Warn of Risks Ahead of Fed Rate Decision
A crypto trader has cautioned that heavily leveraging positions before the upcoming Federal Reserve interest rate decision could lead to significant financial losses in the cryptocurrency market. Following the Fed’s announcement to maintain interest rates within a range of 4.25% to 4.5%, Bitcoin’s price experienced minimal movement, as market participants had largely anticipated the decision.
However, after Fed Chairman Jerome Powell indicated that the likelihood of a recession is low — contradicting some independent economists’ warnings — the cryptocurrency market experienced a surprising upswing. This unexpected turn left many traders, particularly those betting on price declines, feeling blindsided. The data revealed that over a 12-hour period, approximately $188.77 million in liquidations occurred across the crypto market, with a notable $127.80 million attributed to short positions.
As the market reacted, Bitcoin initially surged by 3.84%, reaching a peak of $87,427 shortly after Powell’s remarks. It later corrected to around $85,760. Ether and XRP also saw gains, with Ether increasing by 2.27% and XRP climbing 2.40%, further enhancing a pre-announcement rally of 7.50%, according to CoinMarketCap data.
While some stated that Powell’s comments could dictate Bitcoin’s price trajectory in the forthcoming period, others expressed skepticism regarding the longevity of the rally. A trading account observed that the recent surge may push Bitcoin toward key liquidation points, suggesting that increased prices may not present favorable conditions for initiating new long positions.
Similarly, a crypto research strategist posited that while the Fed’s dovish stance on interest rates might offer a temporary boost to Bitcoin, sustained growth would likely remain elusive without clear, supportive catalysts. The broader economic landscape seems to favor a long-term bullish outlook for Bitcoin, although immediate consolidation is expected until more definitive factors come into play.
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