Here’s how the crypto market reacted to the Fed’s 0.25% cut
Release: 2024/12/19 18:59 Reading: 987
Fed Interest Rate Cut Triggers Crypto Liquidations
Following the Federal Reserve's decision to cut interest rates by 0.25%, the crypto market witnessed a surge in liquidations exceeding $239 million within minutes. Bitcoin briefly dipped below $100k, followed by a decline in other major tokens.
On December 19, the Federal Reserve lowered its key interest rate by 25 basis points, warning of potential cuts in the years ahead. The Fed hinted at two additional possible reductions in the coming year.
Fed Chair Jerome Powell stated that the government's less restrictive stance allows the agency to "be more cautious" regarding further rate adjustments. He emphasized the economy's positive state and the adequacy of current policy.
Coinglass data revealed that after the Fed's rate cut, the crypto market experienced a surge in long liquidations, increasing from $39.73 million to $239.2 million within 30 minutes. Ethereum (ETH) led the liquidations with $134.9 million in the past 24 hours.
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Chart Depicting Total Crypto Asset Liquidations in the Past Day
[Image of chart depicting total crypto asset liquidations by 15-minute intervals on December 19, 2024. Source: Coinglass.]
According to crypto.news, Bitcoin (BTC) briefly fell below $100,000, dropping by 5%, before recovering slightly. It currently trades at $101,705, with a decline of 2.35% in the past 24 hours.
Other major cryptocurrencies such as Ethereum, Solana (SOL), and XRP (XRP) followed suit. Altcoins like DOGE (DOGE) and PEPE (PEPE) also faced challenges post-Fed cut.
Ethereum experienced a dip of 0.68% after the rate reduction. In the past 24 hours, ETH has declined by 4.5%, trading at $3,674. XRP's price dropped by almost 3%, resulting in a 7% decrease in the past day, currently sitting at $2.36.
Solana was not spared either, with a 1.15% decrease following the Fed cut. It has continued to trend downward, totaling a 3.58% decline in the past 24 hours, trading at $208.98.
The altcoin market also suffered, with the total market cap of meme coins falling by nearly 8% to $105.2 billion, as per CoinMarketCap. Dogecoin, the leading meme coin, dropped by over 7% after the Fed cut and has maintained its decline. DOGE currently trades at $0.36.
PEPE experienced a dip of almost 4% shortly after the cut, reducing its value by 11% in the past 24 hours, according to crypto.news.
The Fed's cautious stance regarding future rate cuts indicates a focus on curbing inflation, which may lead to a strengthening dollar. This could potentially reduce public investment in alternative assets such as cryptocurrencies.
Disclaimer: This article does not provide investment advice. The content and material presented are for educational purposes only.
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