The cryptocurrency market faced pressure following remarks by Federal Reserve Chair Jerome Powell regarding the U.S. economy and interest rate policies.
Powell's Stance on Interest Rates
Jerome Powell stated, “The economy does not signal urgency for rate cuts. The existing economic strength allows us to proceed with caution in our decisions.” The recent reduction of interest rates by 0.25% has decreased expectations for a similar move in December. This shift in sentiment has exerted pressure on risk-sensitive assets like cryptocurrencies, as investors adjust to a potentially slower pace of monetary easing.
Crypto Market Experiences Declines
Powell's comments triggered a sell-off across the crypto market, reducing optimism about an immediate rate cut. After peaking at $93,465, Bitcoin fell by 1.84% over the past 24 hours to trade at $89,000. Despite the dip, Bitcoin remains 17% higher on a weekly basis, reflecting the broader market's resilience. Other major cryptocurrencies, including Ethereum, Solana, Dogecoin, and Shiba Inu, also recorded losses ranging from 3% to 7%, amplifying the bearish sentiment.
Selective Gains Amid a Declining Market
Amidst the broader downturn, a few cryptocurrencies bucked the trend and posted gains. Hedera (HBAR) surged by 13%, while Cronos, Stellar, Cardano, Near, and BRETT recorded gains between 3% and 15%. XRP also performed exceptionally well, climbing 15% to reach $0.8122. During the same period, a total of $504 million in positions were liquidated, with $358 million coming from long positions.
The Federal Reserve's cautious approach, as emphasized by Powell, has introduced short-term uncertainty into the crypto market. However, the resilience and performance of selective tokens highlight the diversity of investment opportunities within the ecosystem.
