The US Federal Reserve (Fed) surprised the markets by lowering interest rates by 25 basis points on Wednesday. However, contrary to expectations, this step led to a major sell-off in the cryptocurrency market. Bitcoin suffered a significant loss by falling below the critical support level of $100,000. The Fed’s announcement that it only planned a limited number of interest rate cuts for 2025 had a negative impact on the markets.
The decline in Bitcoin also deeply affected altcoins such as Ethereum (ETH), XRP and Dogecoin (DOGE), causing sharp losses. This situation caused a total of $ 860 million in investments to be liquidated. Although blockchain analysis shows that Bitcoin is more resilient compared to the S&P 500 index, cryptocurrencies could not avoid general market fluctuations.
Fed Chairman Jerome Powell stated that only two interest rate cuts are planned for 2025. While this statement fell far short of market expectations, analysts believe that Powell’s statements further increased the selling pressure. In addition, predictions that Bitcoin could find support at $98,000 have begun to emerge.
The declines in altcoins were sharper than Bitcoin’s. Ethereum tried to recover by staying above the critical support level, but altcoins like XRP suffered significant losses. Analysts pointed out that some altcoins are at risk of experiencing further declines in the future.
On the other hand, while the Bank of Japan’s fixed interest rate policy caused the yen to lose value against the dollar, BlackRock’s Bitcoin ETF inflows had a positive impact despite the negative market conditions. However, net outflows were observed in other ETFs.
The volatility in cryptocurrency markets also showed itself in the Altcoin Season Index. This index fell to 55, signaling to many investors that the altcoin season is over. It is stated that market fluctuations force investors to act more cautiously.
