Why is Crypto Down Today: Fed Inflation Warnings and Massive Liquidations

Following a weaker-than-expected month in October, investors are hoping for better results in the last stretch of 2025. However, the bulls got off on the wrong foot in November as the cryptocurrency market is seeing another intra-day slide this Monday. 

Cryptocurrencies took a nosedive this morning, when a single one-hour candle erased over $100 billion from the market at 10 AM (UTC-5). 

While the buying force is already showing signs of recovery, this sudden and swift move was enough to liquidate hundreds of thousands of investors in a single swoop. 

According to data from CoinGlass, over 300,000 traders saw their positions forcefully closed this morning, with total liquidations coming in at over $1.16 billion. 

The overwhelming majority of liquidations were from investors betting that the market would go up. On the decentralized exchange Hyperliquid, over 99.3% of liquidations in the past four hours were from traders going long. 

Bitcoin traded near the $105k level today, registering a 3.42% decrease over the last 24 hours. Meanwhile, altcoins are taking an even harsher hit, with assets like Solana, XRP, Dogecoin, and SUI seeing losses of up to 9.56% over the last day.

Different from other market retractions, stocks did not react as abruptly as crypto did today. The S&P 500 actually managed to hold steady today, rising slightly by about 0.33% to 6,863.01. This suggests that cryptocurrency traders were caught once again in an over-leveraged cycle, with extra risk magnifying a somewhat modest market correction.

This begs the question: what prompted this Monday's market decline? As it's often the case, the answer likely comes from macro uncertainty fueling risk-off sentiment. 

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Goolsbee’s Inflation Warning Fuels Uncertainty

President of the Federal Reserve Bank of Chicago, Austan Goolsbee, spoke today with Yahoo Finance, striking a cautious tone on the path of monetary policy.

Markets had already priced in last week's interest rate cut by the Fed, and ever since Chairman Jerome Powell spoke in a more cautious tone about future rate cuts in December, Markets had already priced in last week's interest rate cut by the Fed, and ever since Chairman Jerome Powell spoke in a more cautious tone about future rate cuts in December, financial markets have been on edge. 

During the last FOMC meeting, Powell emphasized that future moves would be “data dependent” and that December was not guaranteed for another cut. The head of the Federal Reserve also highlighted concern about the U.S. Government shutdown and how it affects the Committee's ability to interpret data. 

And this unease was deepened today after the President of the Federal Reserve Bank of Chicago, Austan Goolsbee, shared even deeper concerns when it comes to inflation.

"I’m not decided going into the December meeting," Goolsbee told Yahoo Finance. "I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years, and it’s trending the wrong way."

While PCE inflation showed initial signs of cooling earlier this year, the metric has been on a strong uptrend since April. The last reading for August showed an inflation of 2.7%, with the metric slowly detaching from the Fed's 2% target. 

The stickiest components remain shelter and services, which together account for more than half of the index.

For cryptocurrencies, the Fed's policy has shown to have even more influence than in previous months. 

To make matters worse, there's a strong likelihood we won't get to see further inflation prints, at least until the Government shutdown is around.

Yet, the absence of fresh economic data leaves both policymakers and investors navigating in the dark. Until the government shutdown is resolved and new inflation data becomes available, uncertainty will remain the dominant theme.

To end on a good note, it looks like crypto is already recovering from today's dip. Just in the time it took to write this article, Bitcoin threaded upward above $107k, signaling a potential recovery in the upcoming hours.