🚨 🚨 The Fed’s Hawkish Stance: A Key Factor Behind the Latest Crypto Decline 🚨 🚨
#BTC☀️ #ETH #solonapumping Cryptocurrency markets experienced a sharp downturn on Tuesday, with Bitcoin BTC dropping 4% to a low of $97,700. Ethereum ETH, Ripple XRP, and Solana SOL also faced declines of over 5%. This sudden retreat follows concerns over rising U.S. bond yields, which have impacted a range of financial markets, including equities.
The bond market is at the center of this crisis. The 10-year U.S. Treasury yield climbed 1.7% to 4.70%, signaling that the Federal Reserve may take a more hawkish stance on interest rates. This comes after the Fed's December meeting, where they suggested fewer interest rate cuts in 2025 than previously expected. The upcoming release of nonfarm payrolls data and the Fed's meeting minutes on Wednesday could offer further clues about the central bank's future actions.
The broader market has already started reacting. U.S. equity indices like the Nasdaq 100 and S&P 500 saw declines, with major tech stocks like NVIDIA and Tesla hit hard. As bond yields rise, riskier assets, including cryptocurrencies, tend to lose their appeal. Investors may rotate out of these volatile markets and into safer assets, such as money market funds.
This trend is compounded by recent economic data, such as a report from the U.S. Labor Department showing a rise in job vacancies, particularly in the services sector. A stronger-than-expected jobs report could signal tighter labor markets, adding further pressure to inflation and encouraging the Fed to maintain a restrictive policy stance.
Some analysts, including Moody's Chief Economist Mark Zandi, warn that continued bond yield increases could lead to even more significant market shifts. If bond yields keep rising, it could trigger further declines in Bitcoin, altcoins, and other risk-sensitive assets, highlighting the ongoing uncertainty in the crypto market.
