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

According to the digital-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 roughly 15 basis points of rate hikes by year-end. Some observers also expect additional hikes could continue into next year. That means the market scenario that had initially anticipated rate cuts within the year has been completely overturned.

As fears of tighter policy spread, Bitcoin fell back to around $68,000. In Binance's Tether (USDT) market that morning, Bitcoin briefly dropped to $68,153. It is now trading near $68,830, down 3.5% from the previous day. The Fed's missing 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, or bets on gains, accounted for $290 million, or 88% of the total, concentrating the damage from the price drop on bullish positions. Liquidations of short positions, or bets on declines, totaled only about $40.08 million. 123 Ah spelling