On Thursday, cryptocurrency prices continued to fall after a significant Market downturn the previous day, influenced by Federal Reserve Chair Jerome Powell’s comments on interest rate cuts for the upcoming year. Bitcoin, which attempted to recover above $100,000, dropped to the low $97,000s and further declined to below $96,000, marking a 4.8% decrease in 24 hours. Altcoins suffered even more, with the CoinDesk 20 Index falling over 10%. The Market saw nearly $1.2 billion in liquidations of leveraged crypto positions following the Fed’s decision, primarily affecting long positions. The broader economic situation, including a stronger U.S. dollar and rising Treasury yields, added to the Market‘s volatility, leaving many investors concerned about potential corrections.
Crypto Market Faces a Major Setback After Fed Comments
Crypto asset prices took a significant hit on Thursday, following a Market-wide selloff that began on Wednesday. Federal Reserve Chair Jerome Powell’s remarks on U.S. interest rates disappointed many investors, leading to a bearish mood across the crypto Market.
Bitcoin, which had been trying to recover above the $100,000 mark, struggled and fell into the low $97,000s. It briefly bounced back to around $98,000 before dropping again, now trading below $96,000. This represents a drastic decline of 4.8% in just 24 hours.
Altcoins witnessed even harsher losses. The CoinDesk 20 Index, which tracks a variety of cryptocurrencies, plummeted more than 10%. Notable drops were seen in Ethereum’s ether (ETH), which fell 10.8% below $3,500. Other cryptocurrencies, including Cardano’s ADA, Chainlink’s LINK, and Dogecoin’s DOGE, faced steep losses ranging between 15% and 20%. Particularly alarming was Solana’s SOL, which suffered a 26% decrease, hitting its lowest value since November 7.
In the aftermath of the Fed’s decision to maintain a cautious approach towards interest rate cuts, over $1.2 billion in leveraged crypto trading positions were liquidated. Most of these were long positions, indicating that investors were betting on price increases.
Traditionally, U.S. stocks edged up slightly, but did not hold their initial gains as the session progressed. The S&P 500 and tech-heavy Nasdaq both grew by about 0.5% compared to Wednesday’s closing values.
The recent volatility highlights the fragile state of the crypto Market, especially in light of rising inflation fears and a stronger U.S. dollar. Many investors expressed concerns about the sustainability of crypto prices, especially after a significant rally post the recent election results. Market experts suggest that while these pullbacks can be alarming, they may also be a healthy correction following a rapid surge.
In summary, the downturn in crypto prices reflects broader economic sentiments influenced by the Fed’s recent projections, leading to cautious trading practices and heightened vulnerability in the Market. As the year comes to a close, investors are bracing themselves for potential further fluctuations.
Keywords: crypto Market, Bitcoin price, Federal Reserve
Secondary keywords: altcoin losses, Ethereum decline, Market volatility
What happened to Bitcoin as it dipped below $96K?
Bitcoin recently dropped below the $96,000 mark, which has raised concerns among investors. This dip could be due to various Market factors, including heavy selling pressure or external economic news that affects crypto markets.
Why did Ethereum’s price change recently?
Ethereum’s price has also been affected by the Market correction. Investors reacted to Bitcoin’s decline, leading to drops in Ethereum’s value. Such price changes can occur quickly in the crypto world.
What about Cardano and its recent performance?
Cardano has faced similar challenges, with its price tumbling over 10%. This is part of the broader Market correction impacting many cryptocurrencies, including Bitcoin and Ethereum.
Why is Dogecoin down more than 10%?
Dogecoin has seen a significant drop, down more than 10%. It’s common for meme coins to be highly volatile. The recent Market correction and profit-taking by investors can lead to sudden price declines.
Should I be worried about these dips in crypto?
While dips can be concerning, they are a normal part of the cryptocurrency Market. Prices go up and down frequently. It’s important for investors to research and stay informed before making any decisions.
