Following the Federal Reserve's decision to cut interest rates by 25 basis points, Bitcoin and Ethereum have faced declining prices. We analyze the potential implications for the cryptocurrency market.
Impact of Fed's Decision on Bitcoin
At 3 a.m. today (19th), the Federal Reserve announced a rate cut of 25 basis points, bringing the current rate to a range of 4.25% to 4.5%. In response to this announcement, Bitcoin began to decline, falling from a high of $104,800 to a low of $98,802, marking an intraday drop of 5.7%. By the day's end, it slightly recovered to $100,700, reflecting a decrease of 4.16% over the last 24 hours. Federal Reserve Chairman Powell's reluctance to change the legal restrictions on holding Bitcoin might also contribute to investors' decreased confidence.
Ethereum's Decline
Similarly to Bitcoin, Ethereum showed a decline post-Fed announcement, dropping from $3,907 to $3,541, an intraday drop of 9.2%. By the day's end, it traded at $3,656, down by 5.5% over the last 24 hours.
Liquidations in the Crypto Market
According to Coinglass, total liquidations in the crypto market over the last 24 hours reached $863 million. Long positions accounted for $753 million of the losses, while short positions led to about $110 million in liquidations, affecting nearly 300,000 traders.
The Fed's interest rate cut has significantly impacted the crypto market, causing declines in Bitcoin and Ethereum. These events highlight the volatility of cryptocurrencies in relation to macroeconomic policy.
