Cryptocurrency prices took a hit on Thursday, following a selloff on Wednesday triggered by Federal Reserve Chair Jerome Powell’s cautious comments regarding interest rate cuts for the next year. Bitcoin briefly tried to climb back above $100,000 but fell to the low $97,000s before settling around $98,000. Other altcoins faced even steeper declines, with Ethereum dropping below $3,500 and several coins like Cardano and Dogecoin losing 15-20%. In 24 hours, nearly $1.2 billion in leveraged crypto positions were liquidated. This Market correction, partly due to the Fed’s latest decisions, has investors worried—but some analysts believe a pullback could ultimately be healthy for long-term growth.
Crypto Market Faces Significant Drops After Fed Comments
Crypto asset prices took a downturn on Thursday, following a broader Market selloff the day prior. This shift was influenced by recent comments from Federal Reserve Chair Jerome Powell, which let down investors hoping for a quicker reduction in U.S. interest rates next year.
Bitcoin (BTC) initially tried to recover and break back above $100,000 but quickly lost momentum. It fell into the low $97,000s during the U.S. trading hours. Although it briefly bounced back to around $98,000, it ultimately dropped below $96,000, registering a 4.8% fall in just 24 hours.
Altcoins struggled even more. The CoinDesk 20 Index, which tracks a broad range of cryptocurrencies, plunged over 10%. In this unhealthy trend, Ethereum’s ether (ETH) fell 10.8% to below $3,500, with other major cryptocurrencies like Cardano (ADA), Chainlink (LINK), Aptos (APT), Avalanche (AVAX), and Dogecoin (DOGE) seeing losses between 15% and 20%. Notably, Solana (SOL) suffered a dramatic 26% decline, marking its lowest price since November 7, almost erasing gains made from the recent election rally.
Recent data reveals that close to $1.2 billion in leveraged crypto trading positions were liquidated post-Fed’s decision, with over $1 billion from long positions, indicating many investors had bet on rising prices.
While traditional markets showed slight recovery, with U.S. stock indexes experiencing minor gains, the situation in crypto remained bleak. Wall Street’s quick response to Powell’s hawkish tone on inflation further fueled the selloff across various markets, including commodities like gold.
Despite these troubling signs, Market experts suggest that this pullback could be a healthy correction after Bitcoin’s rapid rise. “Historically, year-end selloffs are not uncommon as investors manage losses for tax purposes,” noted Azeem Khan, co-founder of a blockchain network.
Investors are left to ponder the implications of Powell’s remarks and the Fed’s outlook on future rate cuts. The volatility in crypto markets, particularly after significant increases in prices, highlights the delicate balance of investor sentiment amid broader economic indicators.
For more detailed updates on cryptocurrency prices and Market trends, stay tuned as the situation develops.
What caused Bitcoin to dip below $96,000?
Bitcoin’s dip below $96,000 happened due to Market corrections and profit-taking by investors. After reaching all-time highs, many people decided to sell some of their Bitcoin to cash in on profits, which caused the price to drop.
Is this a good time to buy Bitcoin?
Some investors see this dip as a chance to buy Bitcoin at a lower price. However, it’s crucial to do your own research and consider your financial situation before making any investment decisions.
Why did Ethereum’s price drop?
Ethereum’s price often moves with Bitcoin’s. When Bitcoin dropped, many traders sold their Ethereum too. Additionally, Market corrections can lead to short-term drops in prices for various cryptocurrencies, including Ethereum.
What happened with Cardano and Dogecoin?
Cardano and Dogecoin saw significant declines as part of a wider Market correction, dropping over 10%. This is common in the crypto Market, where prices can be very volatile, and changes in one big coin can affect many others.
Should I be worried about the crypto Market?
While dips can be scary, they are a normal part of the cryptocurrency Market. It’s essential to stay informed and remember that prices can bounce back. If you’re investing, focus on your long-term goals and avoid making decisions based on short-term movements.
