On Wednesday (January 14), Bitcoin strengthened during the Asian session, rising over 4% during the day, with the price climbing back to around $95,000, reaching its highest level in nearly two months. Market sentiment is oscillating between "rising macro uncertainty" and "crypto derivatives leverage squeeze," significantly amplifying volatility.
Market and Leverage: Rise Accompanied by Concentrated Liquidations, Volatility Amplified
Investing.com, citing CoinGlass data, reported that the past 24 hours saw mass liquidations in the cryptocurrency market: over 120,000 people were forcibly liquidated with the liquidation amounting to about $684 million. Traders generally believe that the combination of price surges, short covering/buybacks, and the cascading closures of leveraged longs and shorts, are key drivers accelerating the short-term rally.
Catalyst: Powell Under Criminal Investigation, Independence Issues Heat Up
In terms of news, reports that the U.S. Department of Justice is conducting a criminal investigation into statements made by Federal Reserve Chair Jerome Powell continue to create waves. In a statement on the Federal Reserve's website, Powell emphasized that the so-called criminal charge threats are "unprecedented actions," and stated he will continue to fulfill his duties and defend the independence of the central bank.
Against this backdrop, some capital is bringing the narrative of Bitcoin and other "scarce assets" back into focus: When traditional policy expectations are disrupted by political noise, alternative assets are more likely to be used as a hedge against uncertainty.
What to Watch Next: Policy Statements and "Secondary Shock" in Risk Sentiment
In the short term, the market will continue to focus on two lines of clues: whether the subsequent developments surrounding Powell's investigation further disrupt interest rate expectations and risk appetite; and whether derivatives leverage continues to accumulate, making the market more sensitive to news. For traders, heightened volatility requires closer attention to position management and liquidity changes.
