Bitcoin drops 5% to $98,700 after Jerome Powell signals cautious rate-cut plans.
XRP, Solana, and Dogecoin face declines while $803M in futures liquidations are recorded.
Powell dismisses the Fed’s Bitcoin ownership, adding to the ongoing market pressure.
The cryptocurrency market experienced a sharp correction following Federal Reserve Chair Jerome Powell’s comments on interest rate policy and Bitcoin. Major cryptocurrencies like XRP and Solana also experienced single-digit price losses in the last 24 hours.
Bitcoin dropped to as low as $98,700, marking a nearly 5% decline in 24 hours after achieving a new all-time high above $108,000 earlier this week. The sell-off intensified during Powell’s press conference, where he indicated a more measured approach to rate cuts in 2025. He stated the Fed “can therefore be more cautious as we consider further adjustments to our policy rate.”
The price of XRP dropped as low as $2.18 while Dogecoin dropped 9% to $0.3422, reaching its lowest point in a month. The Federal Reserve’s 25 basis point rate cut, while anticipated, came with cautionary messaging that appeared to dampen market enthusiasm.
The impact was particularly evident in leveraged trading, with CoinGlass data showing over $803 million in futures liquidations within 24 hours, predominantly in long positions. Notably, more than $300 million of these liquidations occurred within a single hour following Powell’s comments.
Powell’s direct response to questions about Bitcoin’s potential role in U.S. strategic reserves added another layer of market pressure. When asked about recent proposals, including those supported by President-elect Donald Trump and other Republicans, Powell firmly stated that the Federal Reserve was “not allowed to own Bitcoin” and “not looking for a law change.”
Historically, cryptocurrencies, like other risk assets, have benefited from low interest rate environments due to their tendency for more volatile price movements. This relationship became particularly evident during the Fed’s aggressive rate hikes in 2022 to combat post-pandemic inflation.
The current market correction comes amid a period of strong performance for cryptocurrencies, with Bitcoin setting new all-time highs for three consecutive days before the pullback. This rally had been partially fueled by expectations of more accommodative monetary policy and growing institutional adoption.
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