Bitcoin and other major cryptocurrencies are suddenly flying high on Tuesday, surging in value ahead of Wednesday's Federal Reserve meeting conclusion that's widely expected to bring a third interest rate cut. And that's led to a growing pile of short positions getting liquidated—a rarity of late.
Bitcoin was recently trading above $94,400, the highest price registered since mid-November, according to price aggregator CoinGecko. The price of the leading cryptocurrency had been hovering around the $90,000 mark prior to Tuesday morning's spike, with the coin now showing a 5% climb over the past 24 hours. It's now up about 4% on the week.
Altcoins are faring even better, however, with Ethereum extending its recent rebound with an 8% daily spike to a recent price of $3,359, pushing its weekly gain to more than 16%—the largest spike among the top 10 cryptocurrencies during that span.
XRP, meanwhile, is up about 5% on the day to $2.17, with Solana rising 6% to $144 and Dogecoin up 6% to $0.15.
Crypto traders betting on the future performance of top assets are being hit with liquidations on Tuesday, and while most of the major liquidation days in recent months have been focused on long positions hit by falling prices, it's mostly shorts getting pummeled on the day.
Over $376 million worth of positions have been liquidated over the last day, per data from CoinGlass, with shorts making up $297 million of those. Bitcoin currently dominates the crypto carnage, accounting for about $153 million worth of impacted positions, with Ethereum next up at $110 million.
What's driving Tuesday's price surge? The Federal Open Market Committee (FOMC) began its latest meeting on Tuesday, with the gathering expected to produce the year's third rate cut when the meeting ends on Wednesday. According to CME FedWatch data, interest rate traders currently project a nearly 90% chance that the Fed issues another 25 bps rate cut.
Bitcoin and other risk assets typically perform well in a low interest rate environment, though Tuesday's crypto surge could mean that traders are buying the rumor—with plans to sell the news on Wednesday.
Users on Myriad—a prediction markets platform operated by Decrypt's parent company, Dastan—are increasingly bullish on the prospect of Bitcoin returning to a price of $100,000 sooner than it will crash to $69,000, giving the spike a nearly 80% chance as of this writing. That mark has climbed by 9% over the last day.