Fed's Rate Cut Projection Sparks Market Turmoil: How Crypto Assets Including 10 Bitcoins Faced December's Liquidation Wave

The crypto market experienced severe turbulence following the Federal Reserve’s December 2024 announcement projecting fewer interest rate cuts for 2025 than markets had anticipated. This dovish pivot triggered a massive deleveraging event, wiping out over $1.2 billion in leveraged trading positions and forcing investors to recalibrate their risk exposure across digital and traditional assets.

Bitcoin’s struggle exemplified the broader market dysfunction. After briefly testing $100,000—a psychological milestone many had predicted would hold—the cryptocurrency retreated sharply, sliding to the low-$97,000s before breaking through key support levels to approach $96,000. At that point, 10 bitcoins were worth approximately $960,000, representing a sharp decline from earlier expectations of sustained strength above the six-figure mark.

The Fed’s Hawkish Pivot Catches Markets Off Guard

Federal Reserve Chair Jerome Powell’s comments on inflation expectations and rate-cut projections represented a significant recalibration from market consensus. The central bank’s projection of only two rate cuts throughout 2025—down from earlier expectations—contradicted the bullish sentiment that had propelled crypto assets higher following Donald Trump’s presidential election victory in early November.

The announcement triggered immediate repositioning across financial markets. The U.S. dollar index surged above 108, its strongest level since November 2022, while 10-year Treasury yields climbed above 4.6%—levels not seen since May. This tightening environment proved particularly destabilizing for leveraged positions that had been built during the post-election rally.

Liquidation Cascade: Why 10 Bitcoins Couldn’t Hold $100K Support

The technical breakdown in bitcoin prices unleashed a cascade of forced liquidations. Data from CoinGlass revealed that roughly $1.2 billion in leveraged derivatives positions were wiped out within 24 hours of the Fed announcement. Notably, over $1 billion of these were long positions—bets that prices would rise—indicating that the leverage had been concentrated on the bullish side.

For context, 10 bitcoins at the price point where liquidations accelerated represented approximately $960,000 in notional value. Yet despite this significant capital base, support levels collapsed under the weight of forced selling, illustrating how mechanical liquidations can override fundamental considerations during market dislocations.

Altcoins Face Steeper Declines Than Bitcoin

While bitcoin endured a difficult period, alternative cryptocurrencies suffered more severe damage. Ethereum’s ether tumbled 10.8% to below $3,500, while assets including Cardano’s ADA, Chainlink’s LINK, Aptos’ APT, Avalanche’s AVAX, and Dogecoin all registered 15%-20% losses. Solana proved particularly vulnerable, sinking to its weakest price since November 7—nearly erasing the substantial gains it had accumulated following Trump’s election victory.

This divergence in performance exposed the fragmentation within crypto markets. Risk-appetite dependent assets suffered disproportionate selling, suggesting that institutional and retail investors alike were rotating away from higher-beta positioning.

Market Recovery Signals and Fragile Foundations

By late February 2026, markets began displaying signs of stabilization and recovery. Bitcoin had rebounded to approximately $67,970 with a 3.75% 24-hour gain, suggesting investors had regained some appetite for risk assets. Ethereum recovered to $2,050 with a 7.62% daily advance, while alternative assets including Aptos (+12.40%), Cardano (+9.08%), Chainlink (+7.78%), Avalanche (+8.16%), Dogecoin (+6.72%), and Solana (+6.23%) all posted significant gains over the same period.

Yet analysts caution that structural vulnerabilities remain. The rebound, while encouraging, occurs against a backdrop of elevated macroeconomic uncertainty. Stablecoin supply has stagnated, limiting the ammunition available for aggressive price recovery. Additionally, risk models suggest that cascading liquidation scenarios below $60,000 remain possible should macroeconomic conditions deteriorate further.

Long-Term Perspective: Healthy Correction or Warning Signal?

Market participants remain divided on whether the December downturn represented a constructive correction or an early warning of deeper weakness. Azeem Khan, co-founder and chief operating officer of layer-2 network Morph, argued that the pullback was warranted given crypto’s remarkable year-over-year performance. “When you zoom out and consider the trajectory, a correction like this feels healthy,” Khan noted, adding that year-end tax-loss harvesting among traditional investors could be amplifying selling pressure.

Joel Kruger, market strategist at LMAX Group, attributed the selloff to technical factors combined with fundamental disappointment. “The crypto market had already been priced for perfection following bitcoin’s record run through $100,000,” he explained. “The Fed’s hawkish tone provided the catalyst, but the vulnerability was already embedded in positioning.”

The path forward remains contingent on macroeconomic developments, Federal Reserve policy trajectory, and whether pro-crypto regulatory shifts materialize under the new administration. While 10 bitcoins representing nearly $680,000 at current prices demonstrates significant value concentration, the medium-term outlook for crypto assets depends more on the resolution of broader policy and inflation questions than on any single asset’s technical performance.