6 months ago
42 ARTICLE AD
Crypto market sinks ahead of Fed decision on interest rates
In the lead-up to the upcoming Federal Reserve meeting, investor pessimism has significantly impacted the prices of Bitcoin and Ethereum.
As of the time of writing, BTC has dropped 7.6%, and ETH is down 6% over the past 24 hours. The Bitcoin price is currently hovering around $57,000, while the Ethereum price is stuck at just under $2,900, according to data from CoinGecko.
The volatility has been particularly challenging for derivatives traders, with $457 million worth of crypto futures positions liquidated in the past 24 hours, according to data from CoinGlass. Unsurprisingly, $392 million of those liquidations were long contracts, where traders had placed bets on future price increases.
The sagging prices have been widespread throughout the market, with few assets in the top 100 cryptocurrencies by market capitalization on CoinGecko escaping the sea of red, aside from stablecoins that have managed to maintain their pegs, such as Tether (USDT) and Circle’s USDC.
The US Federal Open Markets Committee is set to publish its interest rate decision at 2 PM (Eastern Time) today, followed by a press conference with Fed Chair Jerome Powell at 2:30 PM. In February, investors seemed certain that May would be the month the FOMC finally cut interest rates, which is typically a bullish sign for risk assets like Bitcoin. Lower interest rates usually encourage traders to move out of US Treasuries and chase gains in riskier assets, such as equities and crypto assets.
However, the Fed’s key interest rate currently stands at a high of 5.25% to 5.5% and has been unchanged since July 2023 as the central bank aims to curb inflation. Policymakers have been closely monitoring inflation, which is currently at 3.5%, hoping to bring it closer to 2% before considering rate reductions. Last month, inflation increased to its highest level since September, making the prospect of rate cuts more distant.
In March, the Swiss Central Bank announced it was cutting interest rates, providing some hope for traders. However, this sentiment hasn’t spread to other major central banks. Months prior, traders seemed certain that the Fed might lower interest rates in June, according to the CME Fed Watch tool. Sentiment has since soured, with more expectation surrounding the Fed not easing out interest rates until at least the end of this year.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
