Test

Bitcoin (BTC) is plunging as expectations for interest rate cuts by the U.S. Federal Reserve (Fed) have faded and the possibility of additional rate hikes has instead emerged. The shift reflects how the interest-rate futures market has begun pricing in further tightening amid concerns that inflation will remain sticky.

According to the digital-asset industry and CME FedWatch on March 26 (local time), the market is no longer pricing in any rate cuts this year. Instead, futures prices now reflect the probability of about 15 basis points of rate hikes by year-end. Some observers even expect additional increases to continue into next year. That means the market scenario that had initially anticipated rate cuts within this year has been completely reversed.

As fears of tighter policy spread, Bitcoin fell to around $68,000. In Binance's Tether (USDT) market earlier in the day, Bitcoin at one point dropped to $68,153. It is currently trading near $68,830, down 3.5% from the previous day. The disappearance of expectations for a Fed pivot appears to have sharply weakened investor sentiment toward risk assets.

Forced liquidations also continued amid sharp price swings. Over the past 24 hours, positions worth a total of $330 million were liquidated across the Bitcoin network. Of that amount, long positions accounted for $290 million, or 88% of the total, concentrating the impact of the price decline on bullish bets. Liquidations of short positions amounted to just $40.08 million. 123