Bitcoin prices held largely steady on Tuesday, extending losses from a $1.5 billion wave of cryptocurrency derivatives liquidations in the previous session, as traders braced for heightened volatility ahead of one of the largest options expiries in the market’s history.
Investors are also watching Fed Chair Jerome Powell’s speech later today for further clues on the central bank’s policy stance following last week’s interest-rate cut.
The world’s biggest cryptocurrency slipped 0.1% to trade near a two-week low of about $112,711. On Monday it had dropped more than 3% below $112,000 before recovering part of those losses.
Data from Coinglass showed that long positions across digital assets were liquidated to the tune of roughly $1.5 billion on Monday, marking the biggest single-day wipeout in months, with over 400,000 leveraged traders losing their bets. Ether plunged as much as 9%, while altcoins such as Dogecoin also posted steep losses.
Reports indicated that the sell off was driven by overextended positions and thinning liquidity, which exacerbated price swings and added pressure as traders crowded into options contracts designed to profit from sharp moves.
The market is now preparing for the expiry of a massive batch of options on Friday, when Bitcoin and Ether contracts worth more than $23 billion are set to settle one of the largest expirations on record, according to Deribit data.
Meanwhile, the Federal Reserve remains a key focus this week. Powell’s remarks follow comments from new board member Steven Miran, and several other policymakers are expected to speak in the coming days. Last week the Fed cut rates by 25 basis points, and its “dot plot” projections pointed to two additional cuts this year despite officials’ cautious tone, underscoring that inflation remains above target and that the pace of easing will depend on incoming data.
Investors are also awaiting Friday’s release of the core Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge.
Separately, Reuters reported that China’s securities regulator has informally asked some mainland brokerages to halt real-world asset tokenization activities in Hong Kong, reflecting Beijing’s concerns about the rapid growth of digital products beyond its borders. The guidance aims to ensure company claims are backed by genuine business and to strengthen risk management, according to sources cited by the agency.
Asset tokenization refers to converting traditional assets such as bonds or real estate into blockchain-based digital tokens. Hong Kong has promoted this sector as part of its drive to become a digital finance hub, attracting Chinese brokerages to roll out new products in the space.
Altcoins continued to post steep losses on Tuesday, with Ether down 1.8% at about $4,190 after Monday’s 9% drop to a one-month low.
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