On December 19, the Federal Reserve lowered its main interest rate by 25 basis points and warned of further cuts in the coming years. The Fed signalled that it would most likely decrease rates only twice more in the coming year.
Fed Chair Jerome Powell stated that because the US government's stance has become less restrictive, the institution may "be more cautious as we consider further adjustments to our policy rate."
According to Coinglass data, the crypto market's overall long liquidation increased by $200 million, from $39.73 million to a whopping $239.2 million just 30 minutes after the Fed rate decrease was announced. Over the last 24 hours, $853 million in crypto assets have been liquidated, with Ethereum (-6.28%) accounting for $134.9 million.
According to data from Markelitics, Bitcoin has decreased by 3.44%.
Bitcoin fell below the $100,000 mark, dropping 5%, but recovering modestly not long after. Bitcoin is presently trading at $101,705, down 2.35% in the last 24 hours of trade.
Other prominent cryptocurrencies, including as Ethereum, Solana, and XRP, had a drop of 4.97% and -5.7%, respectively. Altcoins include DOGE (-8.47%) and PEPE. Pepe -11.89%
Pepe also struggled following the Fed decrease.
Ethereum fell by 0.68% following the Fed rate decrease. Ethereum has dropped 4.5% in the last 24 hours and is still trading at $3,674. Meanwhile, XRP's price dropped by over 3%. In the last 24 hours of trading, XRP has dropped roughly 7% to $2.36.
Solana was not immune to the impact of the Fed decrease. In the last 24 hours of trade, the meme currency favorite's price fell by 1.15% and has continuing to fall by 3.58%. The token is now trading hands for $208.98.
The altcoin market suffered as well, with the total market capitalisation of all coins dropping by roughly 8% to $105.2 billion, according to CoinMarketCap. Dogecoin, the top meme coin by market capitalisation, plummeted by more than 7% shortly after the Fed cut and has not recovered since. DOGE is now selling for $0.36.
Meanwhile, PEPE fell about 4% quickly after the Fed slashed rates and has dropped by more than 11% in the last 24 hours, according to crypto.news data.
The Fed's cautious approach to future rate decreases signals that the focus will remain on controlling inflation, which might lead to the currency gaining. This could signal a reduction in state investment in alternative assets such as cryptocurrencies.
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