Bitcoin plunged sharply and triggered significant liquidations following Fed Chair Jerome Powell’s hawkish stance on inflation despite leaving rates unchanged.
Federal Reserve Chairman Jerome Powell issued a strong warning about rising inflationary pressures caused by recent tariff hikes implemented by President Trump. Powell’s decisive statements led Bitcoin to drop from $118,000 to $115,800 within moments, while Ethereum, Solana, and XRP saw even steeper declines of around 4%.
Powell's hawkish tone triggered widespread liquidation of leveraged positions, resulting in roughly $200 million worth of crypto positions being wiped out. Traders in Bitcoin futures with high leverage suffered significant losses. Powell's stance clearly signaled resistance against Trump's demands for rate cuts, creating clarity in market expectations.
However, crypto markets quickly recovered from the sharp decline, with Bitcoin bouncing back to $118,400 and Ethereum returning to $3,870. Investors are now closely watching July inflation data to gauge the Fed’s next move.
