Markets
Key Fed Remark Shakes Crypto Market; What’s next? By U.Today
U.Today -, the largest cryptocurrency by market capitalization, slumped to an intraday low of $58,528 on Monday, the steepest drop since mid-April, as continued pessimism over the number of rate cuts weighed on sentiment for cryptocurrencies.
The cryptocurrency slide earlier this week came amid doubts over the Federal Reserve’s ability to quickly cut interest rates from two-decade highs.
In the context of the current market situation, Fed officials recently made crucial comments that are set to have significant implications for cryptocurrencies.
Federal Reserve Governor Michelle Bowman said Tuesday that the time is not yet appropriate to start reducing interest rates, dampening hopes for interest rate cuts in the United States. You also said that if inflation does not decline, you will consider raising interest rates.
The comments reflect a prevailing sentiment at the central bank, with most policymakers saying in recent weeks that while they still expect inflation to return to the Fed’s 2% target, they need more evidence.
The S&P 500 and gains wiped out after Fed Governor Michelle Bowman made her comments.
Here’s how the cryptocurrency market responded
Bitcoin and cryptocurrencies, however, have seen a muted, almost unfazed response. Bitcoin rebounded above $62,000 on Tuesday, reaching highs of $62,400.
Cryptocurrencies have also risen broadly, with a handful of cryptoassets in the green as of this writing. Frog-themed cryptocurrency Pepe was trading up 9%, and Dogwifhat (WIF) was also up 7.30%. Notcoin (NOT) is up 13% in the same time frame.
Although slightly down, Bitcoin has moved little over the past 24 hours, up 0.97% to settle at $61,595 at the time of writing.
Bitcoin hit a high of $73,798 in March, but is lagging behind traditional investments like stocks, bonds and gold this quarter. The 200-day moving average, which is currently around $57,738, is observed as a potential support zone for the price in case of further declines.
In the days ahead, investors and market participants will continue to closely monitor the Fed’s policy decisions and their implications for cryptocurrencies.