Cryptocurrencies Decline After Fed Chair Powell's Comments; Bitcoin Falls Below $88,000
Leading cryptocurrencies took a hit on Thursday. This followed comments from Federal Reserve Chair Jerome Powell that lowered expectations for interest rate cuts.
Cryptocurrency Performance:
- Bitcoin (BTC/USD): -2.23%, $88,282.07
- Ethereum (ETH/USD): -3.55%, $3,091.21
- Dogecoin (DOGE/USD): -4.46%, $0.3726
Bitcoin started the day strong, climbing past $91,000. But it fell below $88,000 after the market closed. This drop resulted in a decline of over 2% in just 24 hours.
Ethereum also faced challenges, dropping sharply from $3,240 to $3,040 during the day. However, it did manage to gain 3.89% over the week, though it lagged behind Bitcoin, which was up more than 15%.
In the last 24 hours, over $505 million in positions were liquidated. Nearly $350 million of that was in long positions. Bitcoin's Open Interest (OI) fell by 0.82%, suggesting long liquidations occurred alongside the price drop. Interestingly, more traders are betting on Bitcoin's price rally than those shorting it, according to the Long/Short Ratio.
The Cryptocurrency Fear and Greed Index showed a decrease in "Extreme Greed" sentiment, dropping from 88 to 80 due to the market retrace.
Top Gainers (24-Hours):
- Act I: The AI Prophecy (ACT): +32.46%, $0.8424
- MANTRA (OM): +20.63%, $1.68
- XRP (XRP): +13.42%, $0.786
The global cryptocurrency market capitalization fell to $2.92 trillion, marking a decline of 1.53% in the last 24 hours.
In stock market news, things didn’t look great either. The Dow Jones Industrial Average dropped by 207.33 points, or 0.47%, closing at 43,750.86. The S&P 500 lost 0.60%, ending at 5,949.17. The Nasdaq Composite fell 0.64%, finishing at 19,107.65, making it three straight days of losses.
These sell-offs came after Powell stated that the central bank doesn’t need to rush into cutting rates, given the strength of the economy. His comments led to a significant drop in expectations for rate cuts during the next FOMC meeting, from 82% down to 59%, according to data from the CME FedWatch tool.
Analyst Insights:
Popular cryptocurrency analyst Rekt Capital described early dips in Bitcoin's price discovery phase as "high-probability opportunities." He warned that as the parabolic phase continues, pullbacks could become riskier for dollar-cost averaging.
On-chain analytics firm CryptoQuant noted that high stablecoin inflows are driving the Bitcoin bull market. They indicated that the ongoing influx of stablecoins suggests the Bitcoin bull market isn’t over yet. This could mean more upside ahead.
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