Bitcoin Plunges Below $25K as Investors Brush Off Fed’s Rate Hike Pause
Bitcoin experienced a sharp decline on Wednesday, dropping to around $24,990, as investors appeared indifferent to the U.S. central bank’s anticipated pause in interest rate hikes. This downward trend was reflected across major altcoins, as Ether, ADA, SOL, and Matic all took a late afternoon plunge into negative territory.
Ether, the second-largest cryptocurrency by market capitalization, faced a decline of over 3%, trading at $1,650 less than three hours after the Federal Reserve announced the end of its interest rate increase spree. ADA, SOL, and Matic also experienced significant drops, with each cryptocurrency declining over 4% and ADA plunging more than 5%.
Bitcoin itself had been fluctuating around the $26,000 mark in recent days, but the late afternoon drop pushed it to its lowest level since mid-March, down 3.2% over the past 24 hours. The sluggish movement in BTC can be attributed to a combination of factors, including the market’s evaluation of Securities and U.S. Exchange Commission (SEC) lawsuits against major crypto exchanges Binance and Coinbase, signals from the Fed regarding monetary policy, and broader macroeconomic uncertainties.
The market downturn triggered a cascade of liquidations, with Bitcoin accounting for $37.9 million and Ethereum $55.3 million of the total liquidations. Combined, they constituted approximately 75% of all liquidations. XRP saw $4.1 million of liquidations, while LTC accounted for about $2.9 million. Other cryptocurrencies individually contributed $1.5 million or less to the overall liquidation figures.
Amidst these developments, equity indexes faced their own challenges, primarily driven by concerns that the current cessation of rate increases by the Federal Reserve may only be temporary. The tech-heavy Nasdaq Composite and S&P 500 showed minimal gains, while the Dow Jones Industrial Average sank by 0.7%.
Investors remain cautious as they consider the implications of the Fed’s policy decisions and strive to determine the long-term impact on both the crypto market and traditional financial sectors. The central bank’s focus on curbing inflation, aiming for a 2.5% target, has raised concerns about the sustainability of the current market conditions.
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