Reasons for Bitcoin's plunge:

Hawky FOMC triggered a sharp drop in all risk assets. Nasdaq plunged 3.56%, S&P 500 fell 2.95%, and Bitcoin fell 6.13%.

While the Fed's 25 basis point rate cut was in line with expectations, the source of the panic can be blamed on the downward revision of the dot plot. Due to persistent inflation, the Fed now expects 2 rate cuts in 2025, while the market generally expects 3 rate cuts. Bitcoin fell to a daily low of $98,800 during the Asian trading session, multiple altcoins fell at least 10%, and the market liquidated $258.6 million worth of long positions.

While it is easy to blame the sell-off on the Fed's hawkish rate cuts, the root cause of the morning crash was the market's over-bullish positioning. Risk assets have experienced an impressive one-sided rise since the election, making the market extremely vulnerable to any shock.

QCP Capital: The root cause of the market plunge is the market's over-bullish positioning

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