Bitcoin has fallen below the $77,700 mark on the eve of a critical Federal Reserve decision. Markets are holding their breath, and long positions are already paying a heavy price.
In less than 24 hours, nearly 79,000 traders were liquidated for a combined total of $337.75 million wiped out. The selling pressure raises serious questions about the strength of the current support level.
The question every investor is asking: is this a technical correction before a rebound, or the beginning of a deeper capitulation?
FOMC in Focus: Why Crypto Markets Are Shaking
The Federal Open Market Committee (FOMC) meeting is one of the most closely watched macroeconomic events among crypto traders. Any decision on interest rates — or even a shift in tone from Jerome Powell — can trigger violent moves across risk assets, with Bitcoin leading the charge.
In this environment, the market is anticipating and positioning defensively. Traders are cutting their exposure to volatile assets, which mechanically amplifies downward pressure on BTC. Monetary uncertainty has historically been correlated with a spike in implied volatility on Bitcoin, and the current liquidation data is a direct illustration of that dynamic.
If the Fed holds rates without a clear dovish signal, market sentiment could remain depressed in the short term. Conversely, a more accommodative stance would reopen the door to a swift technical rebound on BTC, with institutional buyers watching key entry levels closely.
$337 Million Liquidated: The Anatomy of a Market Flush
The liquidation figures speak for themselves. In 24 hours, $337.75 million worth of positions were forcibly closed, hitting nearly 79,000 accounts. The vast majority of these liquidations involved long positions — traders who were betting on a continued rally and found themselves caught off guard by the sharp pullback.
This type of event, commonly referred to as a long squeeze, creates a cascading effect: forced liquidations fuel selling pressure, which in turn triggers further liquidations. The result is a rapid decline that is often exaggerated relative to the asset’s actual fundamentals.
On the technical side, Bitcoin is now trading below a key support level. The $77,000 to $78,000 zone served as a former resistance that was flipped into support following the last breakout. A daily close below this threshold would open the door toward $74,000 and potentially $70,000 — a structural demand zone identified by multiple on-chain analyses.
Can BTC Bounce? The Scenarios to Watch
Despite the current pressure, several signals are worth monitoring. On-chain data shows that long-term holder (LTH) wallets have not capitulated en masse — an indicator that is often associated with significant market bottoms. Strong hands appear to be waiting rather than selling, which limits the downside potential over the medium term.
On the derivatives side, the funding rate on major exchanges has flipped back into negative territory, signaling a dominance of short positions. Historically, a prolonged negative funding rate often precedes a short squeeze — a sharp rally that forces short sellers to buy back their positions.
The catalyst could come directly from the FOMC. If Powell adopts a softer tone than expected on the rate trajectory, Bitcoin has the technical potential to quickly reclaim $80,000 and retest the $82,000 to $85,000 resistance range. If not, caution remains warranted as the market continues to face persistent macroeconomic headwinds. Read more about Bitcoin purchases and market trends.
