The cryptocurrency market witnessed a dramatic surge in volatility on Friday evening, as in just four horse approximately $400,000,000 worth of shorts positions were liquidated after Federal Reserve chairman Jerome Powell hinted at potential rate cuts during a speech at Jackson Hole.
The majority of those losses were attributed to traders holding short positions, which accounted for over $304 million of the total amount, according to data from CoinGlass.
Ether (ETH) positions were the hardest hit, with a staggering $217.16 million liquidated as the price rose from $4,200 to $4,650, marking a 10% gain. Bitcoin (BTC) positions saw the second-highest liquidations at $80.04 million, while other altcoins like Solana (SOL) and Dogecoin (DOGE) also experienced significant pain, with $21.77 million and $9.06 million liquidated, respectively.
Data shows the liquidations were concentrated on a few major exchanges. Bybit led the activity with $143.51 million in total liquidations, followed by Binance at $87.32 million. According to CoinGlass, the largest single liquidation order of the day was a $10 million ETH-USDT-SWAP on the OKX exchange.
BTC bounced off the $111,800 support sharply by raising 4% to $116,183. This support was critical as it was a record high set in May. The bounce indicates a bullish reversal following a one-week downtrend from $124,500.
Despite fears that Powell’s speech would have a hawkish tone, he said “the downside risks to employment are rising,” and “If those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.” The comments suggest rate cuts could be on the table next month, which would directly benefit risk assets like bitcoin and ether.
The market remains volatile following the speech, with BTC pulling back slightly from $115,700 to $114,800. While liquidations have taken derivatives positions out of the market, open interest has risen to its highest point in four days, suggesting that the bounce is also being backed by leverage.
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