The market’s reaction to CLARITY could be a reality check for crypto.
After the downtick, the total crypto market cap shed more than $120 billion, dropping to $2.54 trillion. This also marked its lowest wick since the mid-August cycle. However, the bigger risk could come over the next 24 hours, with the FOMC meeting now in focus.
The key takeaway? Rate expectations are starting to line up in a way that could put more pressure on crypto. As seen in the chart below, central bank watchers now overwhelmingly expect not only a rate hike this week, but another hike before the end of the year. If this comes to pass, another wave of crypto selling could occur.
In this context, the last 24-hour crypto sell-off could just be the beginning. Bitcoin [BTC] dropped below $75k for the first time since August, adding to the broader selling pressure. Top-cap altcoins followed, with XRP declining by 9.2% to $1.29, and Ethereum [ETH] falling 4.3% to $2,402, while Solana [SOL] fell to $97.10 as of writing.
Therefore, the question arises: If FUD builds around the FOMC, could this correction extend even further?
$300 million in liquidations raise risk of a deeper crypto sell-off
The last 24 hours have been a liquidation bloodbath.
According to CoinGlass data, almost $600 million was wiped out across the crypto market, with more than $570 million coming from long positions alone. That was the biggest long-liquidation wave since the 22nd of August, when Bitcoin peaked near $80,000 before selling pressure took over the next few sessions.
This brings the $75,000 level back into focus as a possible local top. But there is one interesting detail: crypto is still showing some resilience. Treasury yields have pushed above 5%, ETFs saw more than $450 million in outflows on the 15th of September alone, and the CLARITY setback added another layer of uncertainty.
Yet BTC was down only about 3%, with around $195 million in long positions liquidated.
In essence, leverage still looks relatively controlled, which could be an important divergence for the market. With speculative positioning remaining measured and crypto showing resilience, another round of higher yields, ETF outflows, and even a rate hike could potentially be absorbed without triggering a deeper sell-off.
If this resilience holds, the current correction could just be a healthy reset, suggesting that a broader market top could still be some distance away.
