The crypto market has fallen sharply in the last 24 hours. A 3% slide has taken the crypto market capitalization from $3.90 trillion to $3.74 trillion. While the SEC has been changing its ways to embrace crypto, it seems that the Fed’s relentless approach towards keeping interest rates unchanged is hurting markets more than ever.
The US tariffs, economic and job data reports have trickled down their negative impact on both crypto and equity markets. Any macroeconomic uncertainty, especially related to trade, tends to trigger a sell-off in riskier assets like cryptocurrencies.
If the current bearish trend persists, the total crypto market cap could face a further decline. A drop below the $3.73 trillion support level would likely lead to a test of the $3.61 trillion mark.
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Bitcoin, Ethereum, XRP and Crypto-Based Stocks Slump
Bitcoin slid to $117,000, Ethereum nosedived $3,760 and XRP slumped to $3.90. Coinbase fell by 2.5%, Bitmine fell by 7.41% and global payments platform Paypal also fell by 9.52%.
Kraken dropped its OTC report last week, recording that Bitcoin peaked at its all-time high—$123,000—and since then has seen a modest pullback.
Fed’s Rate Decision: High Interest Rates with Compliant Crypto
The Federal Reserve continued its hawkish stance, signaling that higher interest rates will continue in order to combat inflation. This makes riskier assets like cryptocurrencies less appealing to investors. This, compounded with significant liquidations, has increased the downward pressure. Over $631 million in leveraged positions were automatically sold off as prices fell
Wrap Up
Despite the current market downturn, technical analysts suggest that the long-term trends continue to be bullish and the current correction is more temporary. Usually, such downturns are followed by a significant rally towards new ATH for both Bitcoin and altcoins.
