Crypto Market Drops as Fed Signals Hawkish Rate Cuts

The crypto market took a hit on Wednesday after the Federal Reserve's latest policy announcement. The Fed reduced the federal funds rate by 25 basis points, bringing it down to 4.25%-4.50%. While this move was expected, the real market impact stemmed from the Fed’s updated outlook for 2025. Fed Chair Jerome Powell revealed that anticipated rate cuts for 2025 had been reduced from four to just two, signaling a more hawkish stance. Additionally, the Fed raised its 2025 PCE inflation forecast from 2.1% to 2.5%, suggesting a potential rise in inflation.

In response, major cryptocurrencies fell sharply. Bitcoin dropped 5.4%, falling to $100,314, while Ethereum saw a 6% decline. Solana, $DOGE coin, and $XRP lost 7-10%, with the total crypto market losing over $200 billion in value. Over $675 million in liquidations occurred within 24 hours, with Bitcoin and Ethereum contributing more than $100 million each. This downturn also had a ripple effect on traditional markets, with the S&P 500 also experiencing a sharp drop, highlighting the growing correlation between crypto and equities.

As investors brace for a challenging 2025, the outlook for a crypto market rally becomes more uncertain.

$BTC #MarketCorrectionBuyOrHODL? #MarketPullback #Fed25bpRateCut