Federal Reserve Chair’s Comments Impact Crypto Markets
The crypto markets experienced a decline following Federal Reserve Chair Jerome Powell’s remarks stating that the central bank is not rushing to cut interest rates. Powell emphasized that there is no urgency to lower rates, citing the current strength of the economy as a key factor in the Fed’s decision-making process.
Fed’s Stance on Rate Cuts
- The Fed recently lowered its benchmark borrowing cost by a quarter percentage point.
- Traders anticipate a similar rate cut in December.
- Powell’s comments have dampened expectations for a December rate reduction.
These statements from Powell come in light of recent economic indicators, including inflation and employment figures released earlier in the week. The producer price index grew as predicted, while initial unemployment claims decreased, signaling ongoing economic strength.
Crypto Market Price Movements
Powell’s comments had a notable impact on market sentiment, leading to a downturn in prices across various cryptocurrencies.
While Bitcoin is showing signs of recovery, its price remains down by 1.84% in the last 24 hours, standing at $89,000. However, the cryptocurrency has still seen a 17% increase on a weekly basis.
Other cryptocurrencies such as Ethereum, Ripple, and Litecoin experienced declines ranging from 3% to 7% within the same timeframe. Some tokens like Dogwifhat, Neiro, and Mew saw even larger losses of 12% to 14%.
Despite the overall market downturn, a few cryptocurrencies managed to see gains. Hedera (HBAR) surged nearly 13%, while Cronos, Stellar, Near, and BRETT recorded increases of 3% to 15%. Additionally, Cardano outperformed the top 10, rising by 15% to $0.8122.
According to CoinGlass data, $504 million in positions were liquidated across all cryptocurrencies in the last 24 hours, with $358 million coming from long positions.
This article was originally published on U.Today
Analysis of Market Impact
The Federal Reserve’s stance on interest rates plays a crucial role in shaping market sentiment, including the crypto markets. Powell’s comments indicating no rush to lower rates have led to a shift in expectations, impacting the prices of various cryptocurrencies.
Investors and traders closely monitor such statements and economic indicators to assess the overall health of the economy and make informed decisions about their investments. Understanding the relationship between central bank policies, economic data, and market movements is essential for anyone looking to navigate the volatile world of finance.