XRP and DOGE Futures See $70M Liquidations Amid $700M Crypto Market Wipeout
The cryptocurrency market experienced a sharp downturn as Bitcoin (BTC) slid below $100,000 late Wednesday, triggering over $700 million in liquidations across futures tied to major tokens. Notably, XRP and Dogecoin (DOGE) futures accounted for an unusually high $70 million of the liquidations, signaling heightened speculative trading in these assets.
BTC’s decline coincided with comments from Federal Reserve Chair Jerome Powell following the latest Federal Open Market Committee (FOMC) meeting. The Fed announced no immediate rate changes but hinted at potential rate cuts in 2025. Powell also addressed President-elect Donald Trump’s proposal for a strategic Bitcoin reserve, clarifying that under current regulations, the Fed is prohibited from holding bitcoin.
“That’s a matter for Congress to decide, but we’re not seeking any changes to the law,” Powell stated during the post-meeting press conference. Trump had previously pledged to retain all seized Bitcoin under his administration and consider expanding the U.S. government’s crypto reserves.
Following Powell’s remarks, BTC dropped another 3%, intensifying a broader market selloff. XRP, DOGE, and Solana (SOL) led the losses among major altcoins, each falling by more than 5%, while Ethereum (ETH) and Binance Coin (BNB) dropped around 2.5%. Chainlink’s LINK recorded the steepest decline, plunging 10% despite a recent rally fueled by Trump-backed World Liberty Financial’s $2 million token acquisition.
The liquidations across crypto futures were particularly pronounced in smaller altcoins and meme tokens, diverging from the usual concentration in BTC and ETH futures. Analysts suggest this cascade of liquidations may reflect heightened market volatility and could indicate a potential reversal if sentiment stabilizes.
Market participants offered mixed reactions to Powell’s statements and the broader market pullback. Nick Ruck, director at LVRG Research, suggested Powell’s remarks could signal a temporary peak for the crypto rally.
“Crypto markets may have hit a local top, as the absence of a U.S. Bitcoin reserve undermines the narrative that drove recent price surges. While a rate cut would typically be bullish, the persistent inflation outlook tempered the market’s reaction,” Ruck told CoinDesk.
Despite the short-term volatility, Singapore-based QCP Capital maintained an optimistic outlook for the coming year.
“Don’t let a short-term dip shake your conviction. With 2025 shaping up as a potentially bullish year, particularly under Trump’s administration, holding positions through this period may yield significant benefits,” QCP Capital stated in a client update.
As traders navigate these turbulent conditions, the market remains poised for further volatility, underscoring the importance of strategic positioning in the evolving crypto landscape.
