#MarketCorrectionBuyOrHODL

BTC plummets after the Fed's message, shaking the crypto market

The cryptocurrency market has experienced a strong setback following the latest announcement from the Federal Reserve (Fed) regarding its monetary policy. Bitcoin, the leading cryptocurrency, dropped by 4.6%, while Ether suffered an even greater decline of 5.96%, after Fed Chairman Jerome Powell indicated that fewer rate cuts are expected than initially projected for 2025.

While the 25 basis point cut in the benchmark rate was already anticipated, generating some euphoria among traders, Powell's statements about the possibility of only two additional cuts in 2025 injected a strong sense of uncertainty into the market.

But that's not all. The Fed also raised its inflation outlook for 2025, increasing it from 2.1% to 2.5%. This rise in inflation expectations has been interpreted by many traders as a bearish signal, leading to a wave of selling in the cryptocurrency market.

Causes of the market drop:

Statements from the Federal Reserve (Fed):

Jerome Powell, Fed Chairman, stated that the institution cannot own Bitcoin, according to current laws. This statement cooled expectations that the Fed could incorporate Bitcoin into its reserves, an idea that had gained traction following Donald Trump's electoral victory.

Interest Rate Cut with Restrictive Approach:

The Fed announced an interest rate cut, but with a restrictive tone, which generated uncertainty in the financial markets. This approach can negatively affect risk assets, including cryptocurrencies.