Crypto Market Tumbles Following Fed’s Rate Cut, Over $850 Million Liquidated
The cryptocurrency market has experienced a severe downturn, with more than $850 million lost due to liquidations. Previously, the Federal Reserve announced that it would cut its benchmark policy interest rate by 25 basis points.
Although markets expect the Fed to cut interest rates slightly, Fed Chairman Jerome Powell signaled a conservative approach to future interest rate adjustments in 2025, sparking market uncertainty and a broad sell-off.
Bitcoin plunge causes nearly 300,000 cryptocurrency traders to liquidate
At the press conference, Powell pointed out that time Inflation has been falling ‘steadily’its decline was “slower than expected.” Therefore, the Fed revised inflation Growth is expected to be as high as 2.5% in 2025, indicating a possible tightening of economic conditions, which could limit liquidity in financial markets, including cryptocurrencies.
“Inflation has made progress toward the Committee’s 2 percent objective but remains elevated. The economic outlook is uncertain and the Committee is focusing on risks to both sides of its dual mandate,” Fed explain in a press release.
This shift in monetary policy caused Bitcoin to fall sharply, falling below $99,000, down more than 8% from April 2019. all time high $108,000. Likewise, the broader crypto market, including major currencies such as Ethereum (ETH)suffered heavy losses.
Revenue in the past 24 hours hit a staggering $869.39 million, according to Coinglass eliminated by liquidationof which $749.59 million came from long positions and $119.80 million came from long positions shorts. Notably, altcoins bore the brunt, accounting for more than $222 million in liquidated assets.
A total of 299,335 traders were caught off guard by these market moves. The largest single liquidation order occurs in Binanceinvolving an Ethereum transaction worth $7 million.
Despite these setbacks, cryptocurrency trader sentiment remains surprisingly resilient. this Crypto Fear and Greed Index Currently 75 years old, reflect Strong market prospects volatility. The sentiment underscores the continued appeal of cryptocurrencies as an investment, even in turbulent times.
This optimism has been bolstered by significant inflows into Bitcoin-related investment vehicles. For example, BlackRock’s iShares Bitcoin Trust, recorded Wednesday alone saw $359.6 million in new investment. Meanwhile, total inflows across all spot Bitcoin ETFs reached $275.3 million.
These developments reflect the Fed’s caution and the crypto market’s optimism, illustrating the complex interplay between macroeconomic policy and crypto markets. Investors appear to be hedging against economic uncertainty by accumulating digital assets, which are seen as a viable strategy for portfolio diversification despite their inherent volatility.
Recent market activity has highlighted the impact of U.S. monetary policy on the cryptocurrency industry. As the Fed continues to guide Challenges related to inflationThe cryptocurrency market’s reaction remains swift and clear.
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