Bitcoin and other major cryptocurrencies are taking a hit today, despite what seemed like a positive shift in U.S. economic policy. After the Federal Reserve announced a 25 basis point interest rate cut yesterday, traditional markets saw a surge—precious metals jumped, and the U.S. dollar weakened. But crypto didn’t follow the trend.

The U.S. dollar index (DXY) dropped to its lowest level in seven weeks, giving a boost to assets like silver, which soared to $64 per ounce. Meanwhile, the yield on 10-year U.S. Treasury bonds fell from 4.20% to 4.12%, signaling more investor interest in safer assets. Usually, when interest rates go down, riskier investments like Bitcoin and altcoins benefit. But this time, the crypto market reacted differently.

Bitcoin initially spiked above $94,000 right after the Fed announcement but quickly reversed course. It tumbled back down to around $89,500—losing over 3% in value in just a day. Ethereum didn’t fare much better, dropping 5.5% to around $3,160. Other top cryptocurrencies like XRP, Solana (SOL), and Cardano (ADA) also posted significant losses, with Cardano down more than 11%.

One reason for the broader market weakness is the sharp drop in artificial intelligence (AI) stocks following a disappointing earnings report from Oracle. Oracle shares fell by 14%, dragging down other tech heavyweights like Nvidia, AMD, and Broadcom. This caused the Nasdaq index to open 1.2% lower, adding more pressure to investor sentiment.

Bitcoin mining and crypto-related companies were hit hard as well. AI-infrastructure-focused firms like Hut 8, Iren, Cipher Mining, and Riot Platforms all fell between 5% and 6%. MicroStrategy (MSTR), known for holding large amounts of Bitcoin on its balance sheet, dropped 6.4%. Coinbase lost 5%, and Robinhood slid 8.3% due to weak crypto trading volumes last month.

Crypto liquidation data reveals how intense the sell-off has been. In the last 24 hours alone, $531.3 million worth of crypto positions were wiped out. Of that total, $403 million came from long positions—bets that prices would go up—indicating that many bullish traders got caught off guard. Short positions made up the remaining $128 million.

Liquidations continued at a rapid pace: $95.6 million in the last 12 hours, $62.5 million in the past four hours, and $11.3 million just in the last hour. The fact that most of these were long positions shows that investors expecting a post-Fed bounce are being forced out of the market.

As of now, Bitcoin is hovering around $89,500 and Ethereum is near $3,160. Other major altcoins are also struggling—XRP is down to $1.99, BNB to $864, Dogecoin sits at $0.13, and Cardano continues to slide sharply.

In short, despite a rate cut that typically helps risky assets, the crypto market is under heavy pressure due to broader tech weakness and high leverage being flushed out of the system.