Bitcoin traders betting on higher prices got burned Tuesday. Some $134 million in long positions were wiped out as the largest cryptocurrency briefly touched an intraday low of $62,684. The move came during a session already on edge — markets are bracing for a Federal Reserve showdown and a slew of other macro events this week.
Bitcoin has since recovered slightly, trading around $63,600 at press time. But the damage to leveraged longs is done. The liquidation cascade hit overleveraged positions hard, forcing automated sell-offs that amplified the drop.
The liquidation cascade
Data from major exchanges shows the $134 million figure is concentrated in Bitcoin longs, though altcoin positions also took a hit. The sudden flush happened in a matter of hours, catching many traders off guard. Open interest dropped sharply as margin calls triggered forced closures.
This isn't the first time this year that a concentrated liquidation event has rattled the market. But the timing isn't great — it comes just as traders were positioning for a potential breakout.
Macro backdrop
The sell-off unfolded ahead of a pivotal macro week. The Federal Reserve is set to deliver its latest rate decision on Wednesday, with markets split on whether it will hold or cut. On top of that, key jobs data and earnings from major tech firms are due. Any of these could shift risk sentiment in either direction.
Bitcoin has been trading in a relatively tight range for weeks, with resistance around $65,000 and support near $60,000. Tuesday's drop tested the lower end of that band before bouncing.
All eyes are now on the Fed. A dovish outcome could fuel a recovery, while a hawkish surprise might send Bitcoin back toward $60,000 support. For now, the liquidation event has reset leverage in the system — but with macro uncertainty high, traders are watching the next few sessions closely.
