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The cryptocurrency markets lost nearly $1.25 Billion on Thursday.
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Fed chairman Jerome Powell made hawkish predictions about 2025.
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Analysts think the crypto market pullback will be temporary.
The cryptocurrency market dropped nearly $1.25bn on Thursday, following a hawkish Federal Reserve statement after the most recent Federal Open Market Committee meeting. Fed chair Jerome Powell announced that the Fed would be cutting rates by 25 basis points, which is expected to boost the digital asset market. Powell’s predictions for 2025 led to a different outcome.
Powell predicts that the Federal Reserve will only reduce interest rates twice next year, and not increase inflation. The Fed chair’s subsequent statement shocked the cryptomarket, leading to massive drops in cryptocurrency prices. Bitcoin dropped below $96,000 by over 7% in just 24 hours.
Crypto Liquidations & Price Declines
Coinglass data indicates that Bitcoin’s liquidation is over $45million. Ethereum, the second largest cryptocurrency by market cap, had a liquidation of nearly $30 million. After the Fed’s hawkish announcement, most top cryptocurrencies dropped. Dogecoin’s price, the flagship meme currency, fell 18%, XRP fell 11% and Solana fell 11.7%.
Crypto community members reacted to Thursday’s crypto crash. Many retailers expressed concern that the bull run could be over. The stronger crypto supporters, however, said that the crash was a temporary pullback which is normal for the bull market cycle. Most crypto supporters believe that the price will rise again before the end the year.
Bitcoin’s Performance and Industry Developments
Bitcoin has risen 130% despite the crash this year. Many analysts believe that the crypto industry is more important than macroeconomics factors such as the Fed’s announcement. Analysts believe that the pullback will be temporary and lead to more bullish movement.
Read also : FOMC’s Projections Hammer Altcoins and Bitcoin Drops to $100,000
MicroStrategy has made a significant development with its Bitcoin acquisition. The investment firm began buying Bitcoin in November. The firm, which owns nearly 2% Bitcoin’s supply paid $3 billion in December for Bitcoins, when the cryptocurrency reached over $100,000.
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