What happened?
Bitcoin and other major cryptocurrencies fell sharply as traders braced for Fed Chair Jerome Powell’s speech, with BTC down about 3% to roughly $112k and the total crypto market cap slipping by over 3% to around $3.8 trillion. Renewed U.S.–China trade tensions and talk of hefty tariffs added to the panic, triggering big price swings and mass liquidations. That combination left markets jittery and focused on Powell’s remarks as a possible turning point for further losses or a stabilizing bounce.
Who does this affect?
Retail and institutional traders holding high-risk or leveraged crypto positions were hit hardest by the recent declines and large liquidations. Crypto projects and DeFi platforms face tighter funding conditions and more scrutiny, though well-built, utility-driven projects may attract flight-to-quality flows. Broader risk-asset investors and anyone relying on market liquidity also feel the strain, since crypto volatility can spill over into other markets and investor sentiment.
Why does this matter?
This matters because Powell’s tone on interest rates and the economic outlook can quickly shift risk appetite and either calm or worsen the sell-off, making the speech a short-term market catalyst. Heightened volatility and forced liquidations can deepen downturns and cause capital to flow away from speculative assets into safer options. That means traders need to manage risk, investors may reprioritize which crypto projects get capital, and upcoming policy or trade decisions could set the market’s direction for weeks.