Bitcoin fell 2% on Tuesday, reaching an intraday low of $62,684 before recovering near $63,660 as of 2:37 p.m. EST. The decline came as traders positioned ahead of the Federal Open Market Committee meeting and core Personal Consumption Expenditures price index data scheduled for the final week of July. The sharp price movement triggered $134 million in Bitcoin long liquidations and $515 million across the broader crypto derivatives market. Market participants identified the Fed policy announcement and macroeconomic data releases as key catalysts driving volatility. Bitcoin's monthly losses expanded to 4% with market capitalization falling to $1.277 trillion amid heightened uncertainty surrounding Federal Reserve Chair Kevin Warsh's press conference scheduled for 2:30 ET.
Bitcoin Long Positions Face $134 Million in Liquidations
Bitcoin traded near $65,000 on Monday afternoon before initially dipping to just over $63,000 on Tuesday. The cryptocurrency fluctuated between $63,000 and $63,500 until around 9 a.m. EST, when another sell-off drove it to an intraday low of $62,684. A relief rally helped Bitcoin recover most losses, but it hit resistance shortly after reclaiming $64,000.
The sharp drop triggered $134 million in leveraged long liquidations in the derivatives market, a steep jump from the $30 million wiped out on Monday. Nearly $22 million in short positions was liquidated, pushing Bitcoin-related liquidations past $156 million. Across the broader crypto market, long liquidations totalled $515 million, compared with $98 million in short liquidations.
Bitcoin remains on course to close July with net gains, a reversal from June when it closed with double-digit losses.
Fed Meeting and PCE Data Drive Market Positioning
The upcoming Federal Open Market Committee meeting, core Personal Consumption Expenditures price index data, and earnings reports from Apple, Microsoft, and Amazon were identified as factors likely to determine Bitcoin's direction. Mike McCluskey, co-founder of TX and a former Fidelity executive, said the press conference by Federal Reserve Chair Kevin Warsh will provide key clues for market watchers.
"What moves markets is Warsh's press conference at 2:30 ET, specifically how he characterizes the inflation picture and whether his language leaves any door open for easing later this year," McCluskey said. "He has been consistently hawkish since taking office in May, and he has deliberately limited forward guidance in a way that makes each press conference the actual policy signal rather than the statement."
McCluskey added that July 30 compounds the difficulty because that is when second-quarter GDP, core PCE, and the Bank of England rate decision all arrive.
Expert Analysis on Price Trajectory
McCluskey stated the constructive scenario is GDP near the 2.3% consensus and core PCE easing from May's 3.4% year-over-year mark. That combination gives the Fed cover to hold without sounding alarmed and restores some of the disinflation narrative that was dismantled in June. However, if either number surprises to the upside, the hawkish read from Wednesday gets reinforced rather than softened.
For Bitcoin, a Fed hold decision with a dovish tone, strong AI capital expenditure guidance, and constructive PCE data could build the $65,000 level into a genuine attempt at $68,000 to $70,000 through August, according to McCluskey.
"A hike, or a hold with hawkish language alongside earnings disappointments, and the $58,000 to $60,000 range comes back into view quickly," McCluskey added. "The market has been patient for six weeks. This is the week it finds out if that patience was warranted."
FAQ
What caused Bitcoin to fall below $63,000 on Tuesday?
Bitcoin fell 2% on Tuesday, reaching an intraday low of $62,684, as traders positioned ahead of the Federal Open Market Committee meeting and core Personal Consumption Expenditures price index data scheduled for the final week of July.
How much was liquidated in Bitcoin long positions on Tuesday?
The sharp price decline triggered $134 million in Bitcoin long liquidations on Tuesday, a steep increase from the $30 million wiped out on Monday. Across the broader crypto market, long liquidations totalled $515 million.
What events could determine Bitcoin's price direction in the coming week?
The Federal Open Market Committee meeting, core Personal Consumption Expenditures price index data scheduled for July 30, and earnings reports from Apple, Microsoft, and Amazon were identified as key factors. Federal Reserve Chair Kevin Warsh's press conference at 2:30 ET was highlighted as providing key policy signals.
