The U.S. Federal Reserve recently cut key interest rates by 25 basis points, a decision that typically signals bullish opportunities for risk-sensitive assets such as cryptocurrencies. However, the aftermath has been drastic, with Bitcoin experiencing a notable decline in value.

Over 150,000 traders found themselves liquidated in the wake of this decision. Historical data indicates that Bitcoin often reacts negatively immediately following interest rate cuts. According to Merlijn The Trader, a recognized figure in the crypto community, this pattern has been consistent:

“HISTORY REPEATS ITSELF, UNTIL IT DOESN’T. Every FOMC meeting this year triggered a $BTC dump—10%, 6%, 8%. The pattern is clear. Today’s meeting? The setup is the same, but the outcome doesn’t have to be.” — Merlijn The Trader (@MerlijnTrader)

Despite reaching a temporary calm around $112,000 and $113,000 prior to the meeting, Bitcoin’s value nosedived post-announcement, dropping to just above $109,000.

Currently, Bitcoin has managed to recover slightly, residing above $110,500. Analysts have speculated that the dip could be related to a CME gap that was finally filled after a recent rally, potentially setting the stage for future gains.

Alternative cryptocurrencies also experienced declines, with Ethereum (ETH) dropping below $3,850 and XRP beneath $2.55.

As a result of these shifts, liquidations have surged to over $700 million, with over half occurring in just the last four hours, totaling more than 151,000 wrecked traders. The largest individual liquidation, valued at $11 million, took place on Bybit.

Liquidation Data on CoinGlass
Liquidation Data on CoinGlass