**Crypto Markets Plunge Amid Liquidity Crunch and Fed Policy**
Cryptocurrencies have faced steep declines since Dec. 18, following the Federal Reserve’s cautious messaging on monetary policy. Bitcoin and Ethereum dropped 7.2% and 10.7% in 24 hours, with weekly losses exceeding 5% and 16%.
Fed Chair Jerome Powell signaled tighter liquidity conditions would persist, despite a small rate cut. Analysts, including Jamie Coutts of Real Vision, link the sell-off to shrinking global liquidity, reduced money supply, and rising bond market volatility. With speculative assets like crypto highly sensitive to these conditions, further pain may lie ahead.
