Bitcoin surged to $75,500 in early trading on March 17 before easing to $75,196, while Ether broke above $2,380 and was last seen at $2,351. The sharp move hit derivatives markets hard. Total crypto futures liquidations reached $570 million over the past 24 hours, with short liquidations accounting for $446 million, pointing to an aggressive squeeze against bearish positions.
Short squeeze drives the move higher
The rally was not a slow grind upward. Prices accelerated as short positions were forced out, adding fuel to the move in both Bitcoin and Ether. With short liquidations making up the bulk of total liquidations, the market action suggested a broad unwind of bearish bets rather than a calm, spot-led advance.
That kind of price action can lift sentiment quickly, but it also leaves the market exposed to abrupt reversals. The source material noted that if fresh buying fails to follow the liquidation-driven spike, the current move could still face pullback pressure.
Morgan Stanley keeps its two-cut forecast intact
At the macro level, traders have been cutting back expectations for Federal Reserve easing this year. Even so, Bloomberg reported that Michael Gapen, Morgan Stanley’s chief US economist, said at a Bloomberg roundtable in New York on March 17: “We still forecast action in June and September, though there is obviously a risk of delay.” His view holds even as oil prices have jumped after the outbreak of war involving Iran.
That stance runs against recent market pricing. Futures tied to the Fed policy rate are now implying only a 25 basis point cut by December. Just a month ago, the same market had been pricing in at least 50 basis points of cuts this year. Economists at TD Securities and Barclays also shifted their first-cut forecasts last week from June to September.
Treasury yields and terminal-rate pricing move up
The bond market has been sending a similar signal. US Treasuries sold off sharply last week, pushing the policy-sensitive 2-year Treasury yield to nearly 3.75%, above the Federal Reserve’s reserve rate, a level the article described as rarely breached in historical terms. A market gauge tracking expectations for the terminal rate in this easing cycle has climbed about 50 basis points since late February, moving above 3.4%.
Gapen said he was surprised by the scale of the move in 2-year yields and by how high terminal-rate expectations had been repriced. He also acknowledged that the first Fed cut could slip to September or even December. In that scenario, the next cut might not come until 2027. In his view, the main risk to the forecast is delay, not the complete removal of easing, and a longer wait could increase the need for one additional cut later.
Markets still assign a 60% chance to a September cut
Futures markets currently assign a roughly 60% probability to a 25 basis point Fed rate cut in September. That suggests investors have scaled back their optimism on easing, but have not ruled out action in the second half of the year. In crypto, the jump in Bitcoin and Ether briefly outweighed the broader risk-off tone linked to rising oil prices, while the post-squeeze market still faces elevated volatility.