Fed Key Remark Shakes Crypto Market; What's Next?

Bitcoin Plunges Amid Rate Hike Concerns

Bitcoin, the leading cryptocurrency by market capitalization, experienced a significant intraday decline on Monday, reaching a low of $58,528. This represented the steepest drop since mid-April, fueled by ongoing uncertainties surrounding interest rate adjustments.

As the week commenced, the crypto market faced doubts about the Federal Reserve's ability to swiftly reduce interest rates from their two-decade high. Amidst market volatility, Fed officials made impactful statements that resonated within the cryptocurrency space.

Fed Officials' Comments Dampen Rate Cut Hopes

Governor Michelle Bowman highlighted on Tuesday that the时机 was not yet opportune for interest rate reductions, cooling expectations for immediate U.S. rate cuts. She further indicated the potential for interest rate increases should inflation persist.

These remarks echoed a general sentiment within the central bank, as policymakers emphasized the need for further evidence to support their anticipation of inflation's return to the Fed's target of 2%.

Stock Market Response

The S&P 500 and Nasdaq 100 lost their initial gains following Governor Bowman's comments.

Crypto Market's Response

In contrast to the stock market's response, Bitcoin and cryptocurrencies exhibited a more subdued reaction. Bitcoin rebounded above $62,000 on Tuesday, reaching a high of $62,400.

The broader cryptocurrency market also witnessed a rise, with several cryptoassets posting gains at the time of writing. Pepe, a frog-themed cryptocurrency, surged by 9%, while Dogwifhat (WIF) advanced by 7.30%. Notcoin (NOT) experienced a 13% increase.

Bitcoin's Movement and Potential Support

Despite the initial dip, Bitcoin remained relatively stable over the past 24 hours, trading at $61,595 at press time, representing a 0.97% increase.

Historically, Bitcoin has reached highs of $73,798 in March. However, in the current quarter, it trails traditional investments such as stocks, bonds, and gold. The 200-day moving average of $57,738 may serve as a potential support level if further price declines occur.

Ongoing Monitoring

Investors and market participants closely follow the Fed's policy decisions and their implications for cryptocurrencies in the coming days.