Bitcoin and Ethereum Long Positions Liquidated Amid FOMC Rate Hike Expectations

Virtual asset markets saw up to $632 million (approximately KRW 859.5 billion) in futures positions liquidated over the past 24 hours. Long positions, which bet on price increases, accounted for most of the liquidation as market pressure mounted ahead of the U.S. Federal Open Market Committee (FOMC) rate decision.

AMBCrypto reported that approximately $600 million (about KRW 816 billion) was liquidated across the virtual asset market in the last 24 hours, with over $570 million coming from long positions. TechFlow and Gate reported figures of $488 million (KRW 663.7 billion) and $632 million, respectively; differences stem from varying reporting times and methodologies. However, all reports confirmed that leveraged long positions were heavily liquidated as prices declined.

Gate's data showed $526 million (KRW 715.4 billion) in long position liquidations compared to $16 million (KRW 144.2 billion) in short positions, with longs accounting for about five times more than shorts. Bitcoin (BTC) saw $174 million (KRW 236.6 billion) in long liquidations, while Ethereum (ETH) recorded $181 million (KRW 246.2 billion).

Long positions involve borrowing funds to buy assets expecting price increases; if prices move against the position and margin falls short, exchanges forcibly close them—especially with high leverage, where even small price movements can trigger large liquidations.

The spot market also showed bearish trends. Farside Investors reported $450.4 million (KRW 612.5 billion) in net outflows from U.S. spot Bitcoin ETFs on September 15, with significant outflows from Fidelity's FBTC ($214.8 million / KRW 292.1 billion), BlackRock's IBIT ($161.7 million / KRW 219.9 billion), and Grayscale's GBTC ($44.1 million / KRW 60 billion).

While daily spot ETF flows alone cannot determine Bitcoin’s price direction, the current trend aligns with the futures market liquidations. The FOMC meeting took place from September 15 to 16, with policy decisions scheduled for September 17 at 3 a.m. KST and a press conference at 3:30 a.m. KST.

Markets are increasingly pricing in a rate hike; Kiplinger reported on September 11 that the CME FedWatch indicated an 85% probability of a 25 basis point increase, with AP also noting market participants expect higher rates. The FedWatch probability reflects market expectations embedded in futures prices but does not determine actual interest rates, which are set by FOMC decisions.

The publication previously noted that Bitcoin volatility could rise ahead of the FOMC decision, with rate expectations and spot ETF flows being key variables in the crypto market. Whether this liquidation marks the start of further declines or simply a reduction in excessive leverage remains unclear; the actual FOMC outcome and subsequent U.S. spot Bitcoin ETF flows will be the next key indicators.