Bitcoin sinks below $71k as Powell’s hawkish tone and Iran’s oil shock trigger a $542M liquidation wave across leveraged crypto markets.

Crypto markets extended their slide into Thursday as the combined aftershock of the Federal Reserve’s March policy meeting and an escalating oil shock from the Iran conflict continued to rattle risk assets. Bitcoin (BTC) fell to approximately $71,313 (-4.62%), Ethereum dropped to $2,201 (-5.92%), and a cascade of leveraged long positions was wiped out — with total network-wide liquidations reaching $542 million over 24 hours, of which $448 million were long positions. It was the largest liquidation event in weeks, and the most heavily one-sided since the early stages of the U.S.-Iran conflict in late February.​

The proximate trigger was Wednesday’s Federal Open Market Committee decision and, more critically, the press conference that followed. The Fed held its benchmark rate at 3.5%–3.75% as universally expected, with the FOMC voting 11-1 to maintain that range. But the new Summary of Economic Projections — the first of 2026 — delivered the information markets least wanted to hear. The Fed raised its 2026 PCE inflation forecast to 2.7%, up from a prior estimate of 2.4%, citing the oil shock stemming from Iran’s blockade of the Strait of Hormuz as a direct driver. The dot plot’s median remained anchored at just one 25-basis-point cut for all of 2026, dashing residual hopes for a more accommodative path.

Powell Names the Oil Shock. Markets Hear the Rest.

Fed Chair Jerome Powell was unambiguous in his press conference. “The oil shock for sure shows up,” he said, referring to its impact on the central bank’s projections. In his opening statement, he noted that near-term inflation expectations “have risen in recent weeks, likely reflecting the substantial rise in oil prices caused by the supply” disruption — a reference to the Hormuz closure that has taken roughly 20% of global oil flows offline since late February. Core PCE rose 3.0% in the 12 months through February, well above the Fed’s 2% target. Powell rejected comparisons to 1970s stagflation, arguing unemployment remains near normal levels, but acknowledged the tension between the Fed’s dual mandate goals in the current environment.​

The market reaction was swift and familiar. Bitcoin dropped from approximately $74,000 to $70,900 within hours of the press conference — its eighth decline following an FOMC meeting out of the last nine. The Nasdaq closed down 1.5% on Wednesday, the Dow and S&P 500 reversed five consecutive sessions of gains to hit their lowest levels since November, and 10-year Treasury yields climbed more than 5 basis points. On Thursday, the selloff continued, with the Dow opening down 420 points (-0.91%), the S&P 500 -0.89%, and the Nasdaq -1.23%.

The liquidation breakdown tells its own story: Bitcoin longs alone accounted for $172 million in forced selling, ETH longs for $126 million, with a total of 143,776 traders liquidated globally. The largest single liquidation — an ETH position worth $17.98 million on Aster — underscores how aggressively leveraged some participants were ahead of the FOMC. Long-term Bitcoin holders were also reported to have sold over 1,650 BTC worth approximately $117 million in the wake of Powell’s remarks.

With Brent crude now above $110 per barrel following renewed Iranian attacks on regional energy facilities, and a Fed that has explicitly incorporated oil-driven inflation into its baseline forecast, the conditions for a near-term rate cut have seldom looked more remote.