Cryptocurrency markets have experienced a major loss in value in the last hour, with Bitcoin falling by thousands of dollars. Altcoins, on the other hand, have suffered deeper losses as they have not had the opportunity to recover. So, what are the reasons behind this sudden decline?
Before the Fed minutes to be released on Wednesday, the markets were already talking about the risk of a decline. However, the expected decline occurred much earlier. The fact that Fed Chairman Jerome Powell did not make a positive statement at the last meeting and that there was no data in the minutes to reassure investors led to a loss of confidence in the markets. In addition, weak data in the US stock market also negatively affected the cryptocurrency markets.
The above-expectations JOLTS and ISM PMI data show that the economy continues to grow. However, unless the Fed sees a significant decline in inflation, interest rates could be cut by a total of 50 basis points in two meetings this year. The slow rate cut put pressure on risky assets, causing $331 million worth of long positions to be liquidated in the last 24 hours. In the process, the ETH price also experienced a significant decline, falling below $3,500. A total of approximately 132 thousand investors lost their positions, while the markets were exposed to great volatility. Analysts are evaluating the possibility of a recovery in crypto markets following the correction in US data.
Trump’s Crypto Support Expectation
Despite Trump taking office in January, steps to support cryptocurrency markets have not yet been taken at the expected level. However, the administration is expected to take action to ensure the stability of cryptocurrencies by applying more pressure through its cabinet.
Turkish on-chain analyst anlcnc1 stated that the decline in Bitcoin was due to global markets and that he expects an improvement in cryptocurrency markets along with the recovery of the US markets.
