Bitcoin traded largely stable on Tuesday but extended losses following a massive $1.5 billion wipeout in the digital derivatives market during the previous session, as traders braced for heightened volatility ahead of one of the largest options expiries in the market’s history.

Investors were also awaiting Federal Reserve Chair Jerome Powell’s speech later in the day, which could offer fresh signals on monetary policy direction after last week’s rate cut.

At last check, the world’s largest cryptocurrency was down 0.1% at $112,711.6 by 01:55 a.m. ET (05:55 GMT), hovering near a two-week low.

$1.5 Billion Liquidations… and Powell in Focus

Bitcoin slid more than 3% on Monday, briefly breaking below $112,000 before trimming some of its losses. Data from Coinglass showed that roughly $1.5 billion worth of long positions across crypto markets were liquidated in a single day, marking the largest shakeout in months.

More than 400,000 traders saw their leveraged bets wiped out. Ether dropped as much as 9%, while altcoins like Dogecoin also suffered sharp declines.

Reports indicated the selloff was fueled by overleveraged positions and thin liquidity, which amplified price swings. Losses were further compounded by options traders positioned for outsized market moves.

Massive Options Expiry Ahead

The market now eyes a major expiry of crypto options on Friday. Data from Deribit suggest that over $23 billion worth of Bitcoin and Ether contracts are set to expire, making it one of the largest such events on record.

Fed Policy and Inflation Data in Spotlight

The Federal Reserve remains the central focus this week. Powell’s speech follows remarks on Monday by Governor Stephen Miran, with several other Fed officials also scheduled to speak in the coming days.

The Fed cut interest rates by 25 basis points last week, while its “dot plot” indicated the possibility of two more cuts this year. However, officials emphasized a cautious tone, stressing that inflation remains above target and that the pace of easing will depend on incoming data.

Markets are also awaiting Friday’s release of the core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge.

Beijing’s Quiet Warning on Tokenization in Hong Kong

Separately, Reuters reported that China’s securities regulator has informally told some mainland brokerages to halt real-world asset (RWA) tokenization activities in Hong Kong, underscoring Beijing’s concerns over the rapid growth of digital products beyond its borders.

The guidance, issued in recent weeks, aimed to ensure such products are backed by genuine businesses and that risk management practices improve.

RWA tokenization involves converting traditional assets such as bonds or real estate into blockchain-based tokens. Hong Kong has been promoting the sector as part of its push to become a global digital finance hub, attracting Chinese brokerages looking to roll out new products.

Oil prices rose on Tuesday, even as investors continued to assess global supply expectations, after the Iraqi government and the Kurdistan Regional Government reached a preliminary agreement to restart a key crude pipeline.

Brent crude futures gained 14 cents to $66.71 a barrel by 09:19 GMT, while US West Texas Intermediate (WTI) crude climbed 21 cents to $62.49 a barrel, erasing earlier minor losses.

Both Brent and WTI had declined over the previous four sessions, shedding around 3% of their value.

Giovanni Staunovo, an analyst at UBS, said: “There are still supportive factors, such as low oil stockpiles in OECD countries. But on the other hand, rising crude exports from OPEC+ remain a drag on prices, along with the absence of new sanctions targeting Russian oil exports.”

Traders are closely watching developments in the Middle East after Baghdad and the Kurdish regional government reached an agreement with oil companies on Monday to resume crude exports via Turkey, according to Reuters citing oil officials. The officials added that the deal is pending Iraqi cabinet approval on Tuesday.

The breakthrough would allow exports of around 230,000 barrels per day from Iraq’s Kurdistan region, which have been halted since March 2023.

Overall, the global oil market is bracing for oversupply and weakening demand, weighed down by the rapid adoption of electric vehicles and the economic fallout from US tariffs.

In its latest monthly report, the International Energy Agency said global oil supply is set to grow at a faster pace this year, with the surplus expected to widen in 2026 as OPEC+ output expands alongside rising non-OPEC supply.

Still, risks loom over the market, with traders watching whether the European Union will push forward stricter sanctions on Russian oil exports, as well as any escalation of geopolitical tensions in the Middle East.

A preliminary Reuters poll on Monday showed that US crude inventories likely rose last week, while gasoline and distillate stocks were expected to have declined.

Silver prices rose in the European market on Tuesday, extending gains for the fourth consecutive session after breaking above $44 an ounce for the first time since 2011, setting a new record high. The rally was supported by continued weakness in the US dollar.

The move was also fueled by accelerating demand from retail investors, who view silver as undervalued compared to gold, which continues to hit fresh all-time highs.

Price Overview

Silver prices today: The metal climbed 0.6% to $44.34 an ounce, the highest since May 2011, from an opening level of $44.07, after touching a low of $43.64.

At Monday’s settlement, silver prices gained 2.3% in their third straight daily advance, supported by robust demand for the white metal.

US Dollar

The US dollar index slipped 0.1% on Tuesday, marking a second consecutive decline and moving away from a two-week high of 97.82, reflecting ongoing weakness against a basket of major global currencies.

Beyond profit-taking and corrective moves, the dollar remains under pressure from growing expectations of further Federal Reserve interest rate cuts in the coming months.

US Interest Rates

Fed Governor Steven Miran said on Monday that the central bank is underestimating how restrictive its current policy stance is, warning that the labor market will be at risk if significant rate cuts are not delivered.

According to CME’s FedWatch tool, markets are currently pricing in a 90% probability of a 25-basis-point rate cut at the October Fed meeting, with just a 10% chance of no change.

Jerome Powell

Investors are awaiting Fed Chair Jerome Powell’s remarks later today at the Greater Providence Chamber of Commerce’s Economic Outlook Luncheon in Rhode Island, where he is expected to provide more clarity on the outlook for US monetary policy.

Retail Demand

As retail investors seek safe-haven assets amid the ongoing global shift toward looser monetary policy, silver has emerged as a cost-effective option.

The current surge in silver prices reflects growing recognition among retail investors that the white metal remains significantly undervalued compared to gold, which continues to set historic highs.

The US dollar rose slightly on Tuesday ahead of a scheduled speech by Federal Reserve Chair Jerome Powell later in the session, following the central bank’s recent decision to cut interest rates.

At 03:00 AM ET (08:00 GMT), the dollar index, which measures the greenback against a basket of six other currencies, edged up 0.1% to 97.012, rebounding modestly after a decline in the previous session.

Focus on Powell’s Speech

The dollar has been trading in a narrow range this week after sharp swings last week, as attention turns to Powell’s remarks later today.

Powell’s speech comes after the Fed cut rates by 25 basis points at its latest meeting last week. However, the central bank’s guidance on the future path of borrowing costs left room for debate over the possibility of further cuts before the end of 2025, putting more focus on any signals Powell may provide regarding monetary policy direction.

New Fed governor Steven Miran on Monday called for a sharp rate cut, but several of his colleagues struck a more cautious tone, stressing that the priority should remain ensuring inflation returns to the Fed’s 2% target.

Analysts at ING noted: “Both Alberto Musalem, Raphael Bostic, and Beth Hammack are on the hawkish side of the spectrum, which is not particularly surprising, but their remarks suggest the hawkish front remains relatively firm despite mounting pressure for easing.”

According to CME’s FedWatch tool, markets currently assign about a 90% chance of the Fed lowering its target rate by 25 basis points from the current range of 4%–4.25% at its October meeting. Markets also see around a 75% probability of another 25 basis point cut at the subsequent December meeting.

Euro Slips Despite Strong PMI Data

In Europe, the EUR/USD pair fell 0.1% to 1.1789, with the euro paring gains after its best daily performance in a week during Monday’s session.

Data released earlier Tuesday showed that economic activity in Germany—the eurozone’s largest economy—accelerated in September, recording its fastest pace in 16 months thanks to a rebound in the services sector.

Germany’s flash composite PMI, compiled by S&P Global, rose to 52.4 in September from 50.5 in August, beating expectations of 50.6.

September marked the fourth straight month the index, which tracks services and manufacturing and accounts for more than two-thirds of the eurozone economy, came in above the 50 threshold that signals growth.

ING commented: “This may not be grounds for major excitement about the euro, but it is probably enough to keep the single currency well-positioned to benefit from further shifts away from the dollar.”

The bank added: “We expect EUR/USD to hover around the 1.1800 level today, with the potential for more moderate gains later this week.”