Altcoins like Avalanche and Chainlink have seen sharp declines, with market uncertainty fueled by hawkish rate-cut projections.
Increased trading volume amidst the downturn signals heightened market activity and reactions to changing economic conditions.
The market remains cautious, with reduced rate cut expectations for 2025 weighing heavily on investor confidence.
The "hawkish" rate cuts and future estimates from the Federal Reserve caused drops in the Bitcoin market. Over the past week, the market's total value fell 4.4% to $3.95 trillion. In comparison, trade reached $781.56 billion, a 23% rise. The market reaction reflects heightened uncertainty among traders, particularly after projections revealed fewer rate cuts for 2025 than anticipated.
Altcoins Face Significant Pressure
Altcoins suffered losses, with Avalanche, Chainlink, and Litecoin each dropping by 16% in the past 24 hours. Pepe recorded a steeper decline of 17%, marking it as one of the hardest-hit assets. Bitcoin’s social volume dropped by 5.43%, and its price followed a similar downward trajectory. Ethereum showed the steepest social volume decline of 22.53% among major cryptocurrencies, accompanied by a sharp price decrease.
Moreover, other major assets like Solana, XRP, and Binance Coin also faced notable pullbacks. According to Santiment, the Federal Reserve’s forward guidance significantly impacted market sentiment, creating concerns about liquidity and investor behavior.
Source: Santiment
Increased Market Activity Amid Declines
Despite the market-wide drop, trading volume rose, reflecting increased investor activity. This uptick suggests participants are reacting strongly to changing economic conditions. A treemap of daily performance shows widespread declines, with red dominating large-cap assets. Ethereum exhibited one of the largest declines, while smaller assets like THORChain displayed marginal gains.
The bar chart visualizes daily price movements, revealing double-digit losses for many top tokens. Wrapped Ethereum, TRON, and Chainlink were among the notable decliners. Additionally, the total market capitalization has a consistent downward trend, with the past week showing a 4.38% reduction.
Market Outlook Remains Uncertain
The sharp increase in trading volume suggests heightened volatility amid economic uncertainty. While some view the sell-off as an overreaction, caution remains. Santiment emphasizes that projects with the steepest declines may offer attractive opportunities if sentiment improves. However, traders remain wary as Jerome Powell's projection for reduced rate cuts in 2025 continues to weigh on investor confidence.
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