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

According to the virtual asset industry and CME FedWatch on March 26 (local time), the market is no longer pricing in the possibility of rate cuts this year. Instead, futures prices now reflect the probability of about 15 basis points of rate hikes by year-end. Some observers are even raising the possibility that additional hikes could continue into next year. That means the market's original scenario, which had expected rate cuts within this year, has been completely reversed.

As fears of tighter policy spread, Bitcoin fell toward the $68,000 level. In the Binance Tether (USDT) market that morning, 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 followed amid the sharp price swings. Over the past 24 hours, positions worth a total of $330 million were liquidated across the Bitcoin network. Of that, long positions accounted for $290 million, or 88% of the total, concentrating the impact of the price drop on bullish bets. Liquidations of short positions were limited to about $40.08 million. 123 Ah, the spelling is wrong 123