The Fed's tough stance on 2025 has shaken the cryptocurrency market! Bitcoin and various altcoins have suffered heavy losses, and prices have been falling all the way. However, it is worth noting that Bitcoin's decline is smaller than that of the S&P 500, which gives many investors a little comfort.
On Wednesday, the day the Federal Reserve announced a 25 basis point rate cut, the price of Bitcoin unexpectedly fell below the $100,000 mark, and the market was in mourning. Investors sold their digital assets one after another, reflecting their uneasiness and doubts about the Federal Reserve's future monetary policy.
Although this crash is heartbreaking, it may also be an opportunity for a reshuffle. In the turmoil, real value and opportunities will emerge. Dear investors, are you ready to take on the challenge?
Like Bitcoin, altcoins also faced strong corrections, with declines exceeding 10%. Top altcoins like Ethereum (ETH), Dogecoin (DOGE), XRP, and Solana (SOL) saw corrections of 5-10%, resulting in over $860 million in liquidations.
The cryptocurrency market crash resulted in over $860 million in liquidations
Bitcoin price drops after the Federal Reserve takes a tough stance for 2025
On Wednesday, the Fed cut interest rates by another 25 basis points as expected, marking the third rate cut. Fed Chairman Powell revealed a hawkish tone for 2025, expecting only two rate cuts that year, far below the market's general expectation of four. This news instantly dealt a heavy blow to Bitcoin, causing its price to fall below the key support level of $100,000.
Earlier this week, Bitcoin briefly broke the historical high, reaching a peak of $108,000, but this adjustment instantly erased all weekly gains for BTC. Investors felt the unease in the market, and enthusiasm seemed to cool off in an instant. Powell's statements raised doubts about future monetary policy, and Bitcoin's safe-haven property as 'digital gold' also struggled to escape the fate of volatility.
Jerome Powell stated that the Federal Reserve remains committed to keeping the inflation rate below the target of 2%. The Fed chairman also mentioned that achieving the 2% inflation target may take another 1-2 years, which further reinforces the Fed's hawkish tone.
Despite the crash in the cryptocurrency market, BTC still outperformed the S&P 500 index.
Blockchain analysis platform Santiment reports that BTC has shown stronger relative strength compared to the decline in the S&P 500 index. Santiment noted, "Once the dust settles in the next 24-48 hours, this can actually be interpreted as a strong signal."
Today, the crypto market experienced a massive crash, with several US Bitcoin ETFs facing net outflows, including Bitwise's BITB, Invesco's BTCO, Ark Invest's ARKB, and Grayscale's GBTC, resulting in a generally gloomy market atmosphere. However, it is worth noting that BlackRock's IBIT saw strong inflows of up to $356 million, successfully offsetting the negative impact of this wave.
Renowned economist Alex Krüger wrote:
"Next week is Christmas, which could change everything. In my opinion, a rebound from 98 for BTC and from 195 for SOL would be ideal. Then, it would only rise before the inauguration. The excitement and leverage in cryptocurrencies have basically disappeared, which should minimize downside risks. In my view, the overall situation hasn't changed."
The Bank of Japan keeps interest rates unchanged
The Bank of Japan kept its short-term policy interest rate unchanged at -0.1% on Thursday, choosing to monitor wage growth and inflation trends before making adjustments. This widely anticipated decision highlights the Bank of Japan's cautious stance on monetary policy.
Due to the Bank of Japan not raising borrowing costs, the yen further weakened, with the exchange rate against the dollar falling below the key level of 155.
Recently, the price of Bitcoin (BTC) soared like a rocket, successfully breaking the psychological barrier of $100,000, currently trading at $101,020! This surge has energized the market, and investor expectations have skyrocketed.
According to the latest data from Coinglass, the liquidation amount for Bitcoin surged to $148 million in the past 24 hours, with long liquidations reaching as high as $114 million! This means that many bullish investors may face unexpected losses during this strong rebound, increasing market volatility and causing anxiety.
Altcoins fell more than Bitcoin.
Today, Bitcoin price slid again, bringing a storm to the entire cryptocurrency market! Altcoins that follow Bitcoin's movement, such as ETH, DOGE, XRP, and SOL, were all affected, with declines ranging from 5% to 10%, causing significant pain for investors. Even more shocking is the performance of other altcoins, which saw declines as high as 10% to 20%!
Cryptocurrency market data provider Santiment reports that several major altcoins have seen significant declines in the past 24 hours. Avalanche (AVAX), Chainlink (LINK), and Litecoin (LTC) all dropped 16%, while meme coin Pepe (PEPE) fell 17%, reflecting widespread market turmoil.
A recent report from Santiment pointed out that despite the market experiencing severe corrections, this may actually open new opportunities for buyers looking to buy the dip. The report emphasized, "If the current decline is an overreaction from the market, then those projects that have suffered the most might actually be the most attractive buying choices in the future." This suggests that for investors who can endure short-term volatility, now might be the best time to reposition.
According to Coinglass data, the overall volatility in the cryptocurrency market has caused the total liquidation amount to soar to $860 million. The liquidation amount in 24 hours surged to $684.93 million, while during the cryptocurrency market crash, short-term liquidations reached $200 million.
According to CoinGape, the altcoin season index has further dropped to 55, raising speculation about the end of the altcoin season. According to data from Blockchain Center, the altcoin season index is currently at 55, testing the key support level of 50. Cryptocurrency market analysts expect a rebound from here.
ETH price rebounds from key support level
ETH price plummeted nearly 6%, but rebounded from the key support level of $3,550. Cryptocurrency analyst IncomeSharks emphasized Ethereum's resilience amid recent market volatility, noting that the super trend indicator remains intact and bullish.
"Ethereum ($ETH) has not yet broken its super trend, maintaining a bullish outlook," the analyst stated. "Currently, the price is holding at support level, and in this case, shorting is not recommended."
Can the rise in XRP price amid the cryptocurrency market crash be sustained?
Against the backdrop of a widespread crash in the cryptocurrency market, XRP price fell 6.2% to $2.25. Cryptocurrency analyst IncomeSharks emphasized that XRP is at a crucial moment testing its Supertrend support.
Analysts pointed out: "If bulls can hold this super trend level and establish a bullish consolidation pattern, it will provide strong reasons for re-entry." Additionally, another analysis predicts that XRP price could rebound to $6.
