Crypto Market Sees Widespread Decline: Fed's Hawkish Remarks and Liquidity Expectations Trigger Panic

On December 19, the crypto market experienced a significant pullback, with nearly half of the sectors falling over 10%. According to SoSoValue data, BTC and ETH dropped by 5.14% and 6.11%, respectively, leading to weak market sentiment and widespread pressure across sectors.

Specific market performance:

CeFi Sector: down 5.17%

NFT Sector: after a rise of over 20% yesterday, today it fell 6.01%

Layer 1 Sector: down 8.14%

Layer 2 Sector: down 9.37%

DeFi Sector: down 10.55%

Meme Sector: down 11.33%

DePIN and PayFi Sectors: declines of 11.48% and 11.69%, respectively.

Despite the overall market decline, some individual projects performed well:

NFT Sector: Pudgy Penguins (Pengu) rose 9.54%

Moca Coin (MOCA): rose 10.25%

AI Agents: AI Rig Complex (ARC) rose 54.22%

Why is the market declining?

SoSoValue analysts pointed out that this pullback may be closely related to the Fed's latest monetary policy meeting. The Fed adjusted its projected rate cuts for next year from 4 times to 2 times, and raised its forecasts for future core PCE inflation and GDP growth. At the same time, Powell's hawkish remarks, which exceeded market expectations, caused panic in liquidity expectations, further impacting the widespread decline in the crypto market sectors.

Looking ahead: Although the market is currently in a pullback phase, there are still some quality projects standing out amid the market downturn. Investors should closely monitor the Fed's policy direction and the macroeconomic changes affecting the crypto market, manage risks effectively, and look for promising projects to invest in.