Important points
- BTC price fell from $93,000 to below $91,000 in the past 24 hours as market volatility continued despite the US Federal Reserve’s decision to cut interest rates by 25 bps in December.
- The drawdown resulted in the liquidation of over $140 million across long Bitcoin positions, forcing traders who had hoped for price gains to close out their positions as BTC failed to sustain key intraday levels.
- However, this liquidation event helped flush excess leverage from the market, reducing speculative bets while also creating more room for conditions to stabilize ahead of a potential bull market pricing in Fed rate cuts.
- The willingness of Vanguard, PNC Bank, and Bank of America to allocate a portion of their portfolios to crypto investments and allow customers to gain exposure to regulated digital asset investment products will be key to the next rally.
Bitcoin (BTC) price fell below $91,000 earlier today as the global cryptocurrency market endured a 24-hour period of severe shakeout. Despite the US Federal Reserve announcing a 25 basis point (bps) interest rate cut on Wednesday, the apex cryptocurrency continued to show volatility.
Yesterday, BTC briefly exceeded $93,000, but has returned to the $90,000 level. Over the past week, prices have fluctuated modestly, reflecting overall market volatility.
$140M Leveraged Long Liquidates, Bitcoin Price Drops Below $91K
The drawdown was a targeted attack on traders betting on high prices, as it triggered more than $140 million in long-term liquidations across the market within an hour, according to Coinglass data. Bitcoin’s failure to sustain key intraday levels led to a surge in liquidations, which had a cascading effect across major exchanges and accelerated downward pressure.
The drop in prices forced traders who had hoped prices would rise to abandon leveraged bets. Long-term liquidations typically occur when an exchange automatically closes a leveraged position when prices change for traders, causing them to lose their collateralized BTC.
Such large-scale liquidations often act as a market reset, washing away excess leverage and resetting market positioning. While this move may be painful for short-term leveraged traders, it helps reduce the speculative bubble and gives the market more room to stabilize ahead of a potential rebound. The speed and scale at which liquidation events occurred suggests that there was overleverage at the long end of the market.
CoinGlass analysts noted that this indicates a local depletion point in the crypto market rather than a reversal of a structural trend. If ongoing liquidation pressures subside and spot market demand stabilizes, Bitcoin could attempt to consolidate above key psychological levels. However, volatility is expected to continue as traders reposition themselves following the elimination of leveraged bets in the crypto futures market.
Also read: The strategy of companies to accumulate Bitcoin remains in the Nasdaq 100
US Federal Reserve lowers interest rates by 25bps, but governors remain divided on decision
Bitcoin’s price decline came amid mixed signals from the US Federal Reserve (Fed). A 25 basis points cut in interest rates to a range of 3.40% to 3.75% was widely expected in money markets, but cautious comments from Fed Chairman Jerome Powell and a 9-3 split among Federal Open Market Committee members tempered enthusiasm for risky assets such as cryptocurrencies and stocks. Fed members sympathetic to President Donald Trump’s call for interest rate cuts voted in favor of a 50 basis point cut, but two Fed board members called for keeping rates unchanged.
Analysts described the ongoing market decline as a “selling the fact” reaction, as markets had already priced in the possibility of a rate cut before the central bank’s announcement.
Vanguard, Bank of America, and PNC Bank Expand Cryptocurrency Access to Customers
In a major bullish signal for Bitcoin and the broader crypto market this month, $12 trillion asset management firm Vanguard decided to allow clients to trade regulated crypto investment products such as ETFs and mutual funds tied to BTC, Ether (ETH), XRP, Solana (SOL), Litecoin (LTC), among others, through its brokerage platform. This represents a significant expansion of access to the crypto market for the Wall Street giant’s more than 50 million institutional and retail clients.
Vanguard, which has long downplayed crypto assets, was forced to reverse course following an internal investigation that suggested increased demand for crypto exposure from customers, even during periods of high volatility. The decision was also influenced by the performance of BTC and ETH spot exchange traded funds (ETFs).
In another significant development, PNC Bank has become the first major US bank to offer spot BTC trading directly to eligible retail customers. The bank, which manages over $500 billion in assets, leverages Coinbase’s services. Encryption as a service (CaaS) infrastructure provides transaction services through a digital platform.
Bank of America also issued guidance last week encouraging wealth management clients to allocate 1% to 4% of their portfolios to the following assets: digital assetssignals a major change in approach to BTC and cryptocurrency exposure.
At the time of writing, Bitcoin (BTC) was trading at $90,486, down 1.38% in 24 hours.
