Bitcoin Prices Plummet Below $96K as CoinDesk 20 Index Sees 10% Drop Amid Fed Concerns
Fed Chair Jerome Powell's comments on rate cuts have unsettled investors across different markets.
Key Updates:
- Bitcoin dropped below $96,000, contributing to a 10% decline in the broader CoinDesk 20 Index on Thursday.
- The Federal Reserve indicated only two potential rate cuts for 2025, disappointing market expectations.
- As cryptocurrency prices surged recently, reactions to this "pullback" are being seen as a necessary correction, says Azeem Khan, co-founder and COO of layer-2 network Morph.
Market Overview
Cryptocurrency values dipped sharply on Thursday, influenced by previous market tensions following Powell's hawkish remarks regarding interest rate adjustments. Bitcoin's recovery attempt above $100,000 quickly failed, landing back in the low-$97,000 range. Overall, it has declined 4.8% in just 24 hours.
Altcoins performed even worse, with the CoinDesk 20 Index experiencing a loss exceeding 10%. Ethereum's value fell below $3,500 and similar declines affected other cryptocurrencies like Cardano and Dogecoin, with losses ranging from 15% to 20%. Notably, Solana's price weakened significantly, nearly undoing its post-election gains.
In terms of trading activity, nearly $1.2 billion in crypto derivatives were liquidated in the past day, showcasing a severe exit from long positions.
Concerning traditional markets, U.S. stocks showed slight resilience, but ultimately gave back some pre-market gains. Stock indices like the S&P 500 and Nasdaq experienced a modest rebound.
In summary, concerns about inflation and slower rate cuts from the Federal Reserve have triggered a broad market rout affecting cryptocurrencies, equities, and commodities.
Azeem Khan: “While a pullback like this seems essential, it's crucial to consider the year-on-year growth trends.”
Conclusion
The fluctuating crypto market illustrates the pressures from both traditional and emerging financial landscapes, as adjustments from regulators heavily impact investor confidence.
