Don't be discouraged!
The current crypto slump is mainly attributed to the Federal Reserve’s recent monetary policy announcement. Despite a 0.25% rate cut, Fed Chair Powell’s hawkish stance and indication of fewer rate cuts in 2025 have dampened investor sentiment.
This led to a significant decline in the crypto market, with Bitcoin falling below $94,000 and Ethereum falling to around $3,350.
Total market capitalization declined to $3.3 trillion, marking the lowest level in nearly a month.
Other factors contributing to the decline include:
Tight Global Liquidity Conditions: Central banks are reducing their balance sheets and rising bond market volatility has created unfavorable conditions for risk assets.
Weaknesses in Market Structure: High leverage and weaknesses in market structure also contributed to downward pressure.
Pre-Holiday Low Liquidity Conditions: The current low liquidity conditions have further exacerbated the decline.
It is essential to note that the crypto market is highly volatile and prices can fluctuate rapidly. While the current drop may seem alarming, historical patterns and market fundamentals suggest potential for recovery.
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