Bitcoin Prices Plunged Below $25K, A First in Three Months Course
World’s biggest crypto, Bitcoin, saw a stark price drop, falling below the $25000 mark for the first time in three months. The 4% plunge occurred for the first time after March 17 due to Federal Reserve pausing the interest rates and forecasting future hikes.
The TradingView data reports that Bitcoin fell from $25,867 to $24,819 within thirty minutes. The past week’s trend showed the crypto holding its appeal despite SEC’s legal action against crypto exchange platforms Coinbase and Binance. It moved around the $26,000 mark amidst the looming uncertainty about the macroeconomic factors, like the US Federal Reserve’s stance regarding interest rates signals.
Why Did The Fall Occur?
Bitcoin plunged below $25K within three hours of the Federal Reserve announcing the pause in interest rate hikes. This pause came after a 15-month extensive campaign for increasing rates to fight the rising inflation.
What was the Market Reaction?
The market seemed to be expecting a pause for a while. Following this statement, the Federal Open Markets Committee also gave clues about future rate hikes. This news decreases investors’ interest and thrill for cryptocurrencies like risk assets.
eToro market analyst Josh Gilbert and Federal Reserve Chair Jerome Powell have clarified that this pause would be temporary. This could mean further problems for Bitcoin in the long term.
Gilbert claimed, “Much of the positivity we’ve seen from risk assets this year, including Bitcoin, is built on the expectation that inflation will fall and interest rates will peak and then begin to be cut. Inflation is moving in the right direction, but the comments from Jerome Powell signify that rates could stay higher for longer, which would put Bitcoin on the back foot.”
Impact of Pause on Other Cryptocurrencies
Ether, the second largest crypto, according to market cap, also dropped by 5% in a similar time frame. It plunged $1,727 to $1,631. This bearish tone also affected Altcoins, especially with several of its tokens marked as securities in the SECs lawsuit. Altcoins stumbled down 3%.
Other cryptocurrencies that fell are:
- Cardano ADA 3.4%
- Polygon MATIC 3.3%
- Solana SOL 2.8%
Seeing the current trends and SEC’s take against the crypto industry, it seems a downslide is waiting for the community. Combining regulatory hostility with rising interest in the coming months is not good news.
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