Bitcoin fell to $77,249 on Wednesday, extending losses after a wave of long-position liquidations wiped out $550 million in leveraged bullish bets over the weekend.
The selloff began Saturday when back-to-back elevated Consumer Price Index and Producer Price Index prints forced markets to recalibrate Federal Reserve expectations. What had been priced as a near certainty of rate cuts through 2026 suddenly shifted toward possible hikes, and the crypto market bore the brunt of that repricing.
CoinGlass data showed $581 million in digital asset positions liquidated within 24 hours. Roughly 95 percent of that – approximately $552 million – came from leveraged long positions. Bitcoin led the carnage with $189 million in individual liquidations, followed by Ether at $151 million. The single largest automated liquidation order hit the Bitget exchange via a $21.59 million BTCUSDT position that was forcibly closed by the matching engine.
The numbers tell the story of a market caught off guard. Bitcoin had briefly traded above $82,000 just days earlier, buoyed by optimism around the Clarity Act and a strong August that saw the asset gain more than 15 percent. The weekend reversal erased all of those gains and then some, dropping BTC below the $78,000 level for the first time in two months and catching highly leveraged traders on the wrong side.
Bond Yields and Oil Compound the Pressure
The liquidation wave did not happen in isolation. U.S. 10-year Treasury yields pushed past 4.5 percent as bond traders priced out monetary easing for the rest of the year. The move tracked a broader global bond selloff that saw Japan 10-year yield hit 3 percent – its highest since 1996 – while U.K. gilts surged to 5.25 percent and German bunds reached 3.35 percent.
Crude oil added another layer of concern. Brent crude passed $95 a barrel as overnight strikes near the Strait of Hormuz kept supply disruption fears elevated. Higher energy costs feed directly into the inflation picture that the Fed uses to set policy, creating a feedback loop that makes rate cuts increasingly unlikely.
The combination pushed risk assets lower across the board. U.S. equities posted their worst single-session performance since March, with the S&P 500 falling sharply and the VIX jumping 7 percent. Crypto, which has traded increasingly in lockstep with traditional risk markets through 2026, followed the broader selloff lower without putting up much of a fight.
Altcoins Follow Bitcoin Lower
The damage was not confined to Bitcoin. Ether fell 2.2 percent to $2,407 after being rejected near the $2,500 resistance level that has capped gains for several days. Solana dropped 3.1 percent to $99.97, slipping below the psychologically important $100 mark. XRP slipped 2.3 percent to $1.34, and BNB shed 1.4 percent to $683.
The Clarity Act, which had briefly lifted crypto markets earlier in the week on expectations of clearer U.S. regulation for digital assets, was overwhelmed by the macro selloff. Legislative progress matters less when the broader financial environment turns hostile, and traders are far more focused on Fed rate decisions than congressional votes.
Technically, Bitcoin remains above its 50-day, 100-day, and 200-day exponential moving averages, which cluster between $69,000 and $72,000. That structure suggests the broader uptrend from early 2026 is still intact. But the MACD indicator has turned negative, and the RSI has retreated from overbought territory – both signals that upside momentum is fading fast.
The immediate support zone sits at the 200-day EMA around $72,365, with further downside targets at $66,500 and $62,300 if selling accelerates. On the upside, Bitcoin needs a daily close above $85,000 to confirm the uptrend has resumed and end the current consolidation phase that has defined the past two weeks of trading.
Sovereign Bitcoin Holdings Under Scrutiny
The selloff also amplified concerns about sovereign crypto holdings. On-chain data from Arkham Intelligence indicated that Bhutan sovereign wealth fund Druk Holding and Investments has moved roughly $1 billion in Bitcoin since mid-2025.
The recorded movements reduced the nation verified on-chain holdings from approximately 13,000 BTC to 3,220 BTC, valued at nearly $261 million at current prices. Officials at Druk Holding and Investments denied selling any portion of the state holdings, but the on-chain trail has fueled skepticism among traders who worry about additional supply hitting the market at a time when demand is already under pressure.
September Outlook Hinges on the Fed
For traders, the immediate question is whether the liquidation cascade has flushed enough leverage to allow a recovery, or whether more pain lies ahead. The CME FedWatch tool now shows a 70 percent probability of a rate hike in September, up from 44 percent just one week ago – a dramatic shift that underscores how quickly sentiment has turned.
Crypto market positioning data suggests that long leverage remains elevated despite the weekend wipeout. On Binance alone, roughly $3 billion in long liquidation orders sit below the current price, compared to $1.8 billion in short orders above it. That imbalance means any further decline could trigger another cascade of forced selling that pushes prices considerably lower.
The Fed September meeting looms as the key event for crypto markets this month. Any hint of a rate hike in the post-meeting statement could trigger another round of forced selling in the highly leveraged digital asset market. Until that uncertainty resolves, traders are likely to remain cautious and volatility is expected to stay elevated throughout the month.
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