Bitcoin price today: muted below $113k after crypto liquidations wipe out $1.5 bln

Investing.com-- Bitcoin was nearly unchanged on Tuesday, extending losses from a $1.5 billion crypto derivatives wipe-out in the previous session, while traders braced for further turbulence ahead of one of the market’s largest ever options expiries.

Investors also awaited Federal Reserve Chair Jerome Powell’s speech later in the day, which could provide more clues on the central bank’s policy outlook after last week’s rate cut.

The world’s largest cryptocurrency last traded 0.4% lower at $112,960 as of 09:44 ET (13:44 GMT), trading near its lowest level in two weeks.

Crypto sell-off wipes out $1.5 billion; Powell speech ahead

The token dropped over 3% below $112,000 on Monday but later pared some losses. Data from Coinglass showed about $1.5 billion worth of long positions across cryptocurrencies were liquidated on Monday, the biggest one-day washout in months. 

More than 400,000 traders saw leveraged bets wiped out, with Ether dropping as much as 9% and altcoins such as Dogecoin also posting sharp losses.

Reports said the sell-off was triggered by overextended positioning and thin liquidity, which amplified price swings. It was further intensified by traders holding directional bets via options contracts that benefit from sharp swings.

Market participants are also preparing for a major expiry of option contracts on Friday. According to Deribit, more than $23 billion in Bitcoin and Ether options are set to roll off, one of the largest expiries ever. 

The Federal Reserve is another key focus this week. Chair Jerome Powell is scheduled to speak later on Tuesday, following remarks from Governor Stephen Miran on Monday, while several other policymakers are due in the coming days. 

The Fed last week cut interest rates by 25 basis points and its “dot plot” projections showed two more cuts are likely this year. Still, officials have struck a cautious tone, stressing that inflation remains above target and that the pace of easing will depend on incoming data.

Investors are also awaiting Friday’s release of U.S. core personal consumption expenditures (PCE) price data, the Fed’s preferred inflation gauge. 

China signals caution on tokenized assets in Hong Kong - Reuters

China’s securities regulator has quietly told some mainland brokerages to halt real-world asset (RWA) tokenization activities in Hong Kong, according to a Reuters report, underscoring Beijing’s concern over a rapid build-up in offshore digital asset products.

The guidance, delivered informally by the China Securities Regulatory Commission in recent weeks, was aimed at ensuring firms’ claims are backed by legitimate businesses and strengthening risk management, Reuters reported, citing people familiar with the matter.

RWA tokenization involves converting traditional assets like bonds or property into blockchain-based tokens. Hong Kong has promoted the sector as part of its drive to become a hub for digital finance, drawing in Chinese brokerages eager to launch products.

Crypto price today: altcoins hold losses

Most altcoins traded lower on Tuesday, holding sharp declines from the broad-based selling.

World no.2 crypto Ethereum traded 0.4% lower at $4,188.84, after dropping as much as 9% to a one-month low on Monday.

World no. 3 crypto XRP edged up 0.2% to $2.8623, after hitting a three-week low in the previous session.

Solana fell 2%, while Cardano lost 1.1%, and Polygon slipped 0.8%.

Among meme tokens, Dogecoin also declined 0.8%, while $TRUMP was up marginally.

(Ayushman Ojha contributed to this report.)