Bitcoin (BTC)'s price surged following the announcement of an interest rate cut by the Federal Reserve.
Bitcoin (BTC)'s price surged following the announcement of an interest rate cut by the Federal Reserve. It has come as a surprise to many traders, which has consequently driven a liquidation avalanche of short positions. The leading cryptocurrency is currently trading at $63,885, gaining 2.8% over the past 24 hours.
In that regard, the market's reaction has been swift and decisive with over $154 million in short positions liquidated across all cryptocurrencies in the last day alone. As per data from CoinGlass, Bitcoin shorts bore the brunt of the sell-off, accounting for nearly $74 million in liquidated shorts within the total amount.
Ethereum, the second largest cryptocurrency by market cap, changed hands at $2,437, up 6% in the last 24 hours. More than $33 million worth of short positions got liquidated in the Ethereum market during this time.
The 50bps rate cut decision by the Federal Reserve comes after it had hiked rates to a 23-year high in 2022 on the back of extended increases. Ordinarily, such a pivot in monetary policy has been seen as a signal of goodwill toward riskier assets, such as cryptocurrencies and tech stocks, which do well in a low-interest-rate environment.
While Bitcoin surged to an all-time high of $73,737 in March, it largely surged due to the approval of Bitcoin ETFs. Since that surge, it has struggled to ascend beyond that peak. However, the current rally suggests some regained optimism in the crypto market.
The trend was created by an unexpected rate cut from the Fed that could finally kickstart what crypto traders call "Uptober," indicating a usually bullish period for Bitcoin during October and November.
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