The crypto market suffered a sharp downturn on July 28, erasing recent gains and triggering massive liquidations just a day before the Federal Reserve's interest rate decision. Bitcoin, which had rallied to a multi-day high of $65,600 on Monday, plunged to a ten-day low of $63,000, a drop of nearly $3,000 within hours. The rejection at resistance was violent, and popular analyst CRYPTOWZRD warned that BTC must hold the $63,000 support or risk further declines.
Altcoins followed suit, with Ethereum giving up a $100 gain from its two-month peak of $1,980 to fall below $1,900. XRP dropped 4.5% to $1.06, breaking below the $1.10 support, while Solana (SOL) and Hyperliquid (HYPE) both declined by 6%. The sudden volatility caused a cascade of liquidations: CoinGlass data showed total daily liquidations nearing $700 million, with over 165,000 traders wiped out.
Futures-specific data highlighted that perpetual swaps saw over $308 million in liquidations, with long positions overwhelmingly affected. Bitcoin futures alone accounted for $157.53 million in liquidations, 84.88% of which were longs; Ethereum had $131.53 million liquidated (61.12% longs); Solana recorded $18.93 million (83.35% longs). The heavy dominance of long liquidations underscores the aggressive bullish positioning that was swiftly punished by the market reversal.
The sell-off comes amid heightened uncertainty as investors brace for the FOMC's upcoming rate decision, with fears of a potential hike hurting risk-on assets like cryptocurrencies. Such liquidation events often serve as a reset for over-leveraged markets, but they also highlight the dangers of excessive leverage in volatile trading environments.
