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Bitcoin (BTC) prices are falling sharply 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 shift reflects growing concerns that inflation may remain entrenched, prompting the interest rate futures market to begin pricing in further tightening.

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 are even raising the possibility that additional hikes could continue into next year. That means the market scenario that had initially expected rate cuts within this year has been completely overturned.

As fears of tighter policy spread, Bitcoin fell to around $68,000. In Binance's Tether (USDT) market that morning, Bitcoin briefly 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 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, showing that the impact of the price drop was concentrated on long positions. Liquidations of short positions, or bets on declines, were limited to about $40.08 million. 123 Ah, the spelling is wrong 123