Altcoins Rebound After Sharp Sell-Off as Powell’s Hawkish Tone Triggers $200M in Liquidations

Cryptocurrency markets experienced a jolt of volatility on Wednesday after Federal Reserve Chair Jerome Powell’s hawkish comments unsettled leveraged traders, leading to a wave of liquidations and sharp intraday price swings across digital assets.

More than $200 million in crypto positions were liquidated within an hour, according to data from CoinGlass, as Bitcoin (BTC) briefly fell below $116,000 during Powell’s press conference. The Fed had earlier held interest rates steady, but Powell warned of inflationary risks stemming from the White House’s tariff policies. Notably, two Fed governors dissented, favoring a 25-basis-point rate cut—adding to market uncertainty.

Bitcoin later recovered to trade above $117,000, though still down 0.8% on the day and hovering near the lower bound of its recent three-week trading range. Ether (ETH) dropped as much as 3% before rebounding to around $3,750, marking a 0.6% daily decline.

Altcoins were hit harder in the initial reaction. Solana (SOL), Avalanche (AVAX), and Hyperliquid (HYPE) fell 4%-5% before staging partial recoveries. Meme tokens BONK and PENGU saw sharper plunges of around 10%, then bounced back alongside broader market sentiment.

Despite the crypto turbulence, traditional equity markets saw optimism after-hours, with Meta (META) and Microsoft (MSFT) both reporting robust quarterly earnings. Shares of META surged 10%, while MSFT climbed 6% post-market.

Matt Mena, an analyst at 21Shares, noted in a research note that the Fed may be lagging behind deteriorating economic signals.

“Last week’s soft PCE data and weakening consumer spending suggest the Fed risks overtightening into a slowdown,” Mena wrote. “With rising unemployment and still-restrictive real yields, the policy stance is increasingly out of sync.”

He likened the current setup to late 2023, when softening inflation, political instability, and cautious Fed policy created a pivot-ready environment.

“If conditions continue along this path, we could see the Fed shift gears—and that could be the catalyst to push Bitcoin toward $150,000 by year-end,” Mena added.