Long Liquidations Spike Bitcoin Suffers “Sell the Fact” Reaction to Dovish Fed, But BTC Dip-Buyers Will Probably Pounce

cryptonews.com:

Despite the fact that most market participants interpreted the latest Fed policy announcement as more dovish than expected, hence the drop in the US dollar and US yields, Bitcoin markets saw a “sell the fact” reaction, with the BTC price pulling back sharply and long liquidations spiking.

BTC/USD was last changing hands in the mid-$27,000s, having at one point been as low as the $26,600s, down around 2.2% over the last 24 hours as per CoinGecko.

According to crypto derivatives analytics website coinglass.com, around $60.2 million in Bitcoin futures long positions were liquidated in the first two hours after the Fed’s policy announcement.

Long liquidations for the day were last around $85 million, their highest level since the 8th of March.

The Fed lifted its benchmark interest rate range by 25 bps to 4.75-5.0% as expected, but softened its language on the prospect of further hikes after acknowledging that recent US bank troubles added downside risk to the economic outlook.

Where it had before said “ongoing increases” “will” be appropriate, it now says “some” additional policy firming “may be appropriate”.

The Fed left its quantitative tightening schedule, which allows $95 billion in maturing assets to roll of its balance sheet every month, unchanged, whilst noting that inflationary pressures remain elevated, an unsurprising acknowledgment in wake of recent upside inflation and jobs data surprises.

Finally, the median prediction from the Fed’s new dot plot showed the central bank sees interest rates ending the year at 5.1%, unchanged from the December dot plots and lower than consensus market expectations for 5.4%.

This, combined with the Fed’s shift in language, seemed to be enough to spur a dovish reaction in currency and bond