Bitcoin tumbled below $110,000 on Tuesday, leading a sharp crypto sell-off that triggered nearly $940 million in liquidations. The drop reverses gains made after the Fed’s recent hints about potential interest rate cuts.
What’s happening:
- Bitcoin fell over 2.8% to near $109,800.
- Ethereum dropped 8% to around $4,375, a sharp pullback after just setting a new all-time high near $5,000.
- The sell-off was sparked by a “whale” dumping 24,000 Bitcoin (worth $2.7 billion) on the market, causing a rapid price slide.
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Why it’s happening:
Analysts point to a “perfect storm” of events:
- Macro jitters: Investors are nervous ahead of key U.S. economic data this week that could influence the Federal Reserve’s decision on interest rates in September.
- Political turmoil: Markets were rattled by President Trump’s firing of Fed Governor Lisa Cook, which economists warned “undermines the Fed” and creates uncertainty.
- Leverage crunch: The whale’s massive sale exacerbated price swings in a market already thin on liquidity, forcing the liquidation of highly leveraged bets.
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