Although the Fed kept interest rates unchanged last night as expected, Fed Chairman Jerome Powell’s hawkish remarks caused sharp declines in Bitcoin (BTC) and altcoins.
Bitcoin fell below $70,000, while Ethereum ($ETH) also dropped to around $2,100.
At this point, $ETH recorded an intraday drop of 7% due to the Fed decision and high inflation expectations.
As this decline, triggered by the FED, turns markets red again, the latest data has arrived from the cryptocurrency tracking platform Coinglass.
According to recent data from Coinglass, Ethereum’s price movements are poised to trigger significant liquidation events on mainstream cryptocurrency exchanges (CEXs).
“At this point, if Ethereum falls below $2,000, it could trigger the liquidation of over $2.5 billion in leveraged $ETH long positions across all platforms.”
Furthermore, if these declines in Ethereum continue, there is a risk of a larger “waterfall drop”.
Ethereum’s decline comes amid renewed outflows from US spot $ETH ETFs, which recorded net outflows of over $55.5 million yesterday, ending a six-day streak of inflows, according to Farside Investors data.
Furthermore, according to experts, this decline in Ethereum seems normal. In seven out of the last eight FOMC meetings, $ETH lost value after the meeting. Data shows that post-FOMC pullbacks ranged from 16% to 23%, while deeper declines ranging from 33% to 43% were also observed.
*This is not investment advice.
