Bitcoin, XRP, and Dogecoin prices fell by more than 5% after the Federal Reserve announced an interest rate cut

bitcoin, Previous year. week. XRP also fell by 13%, and Dogecoin saw a 12% decline, reaching its lowest point in a month at $0.348.

The Fed cut interest rates by 25 basis points, bringing the interest rate to a range of 4.25%-4.50%. Despite the cut, Federal Reserve Chairman Jerome Powell’s comments indicated a slowing pace of interest rate cuts in the future. he male Interest rate cuts in 2025 are likely to be smaller due to higher inflation expectations and previous inflationary pressures. Powell’s comments led to a cautious mood in financial markets, with Bitcoin and other cryptocurrencies seeing an immediate drop in prices.

More than $690 million was traded in cryptocurrency derivatives positions Filtered After the Fed announcement. Long Bitcoin positions accounted for a large portion of the total liquidations. This has also caused major disruptions in the broader cryptocurrency market, with altcoins such as Ethereum, Cardano, and Litecoin all experiencing losses of around 10%.

Powell’s statements included the Federal Reserve’s expectations that the interest rate would fall to 3.9% by the end of 2025, which is lower than previous expectations. He pointed out that the slow pace of interest rate cuts is due to the stronger-than-expected economy and persistent inflation. The US stock market also reacted negatively to Powell’s comments, with the S&P 500 and Nasdaq 100 falling. Crypto-related stocks such as Coinbase and MicroStrategy also saw notable losses.

Bitcoin’s surprising reaction to macroeconomic news has highlighted its sensitivity to traditional financial indicators, blurring the lines between decentralized assets and global economic trends. Although low interest rates typically benefit risk assets like Bitcoin, the Fed’s dovish stance led to a sell-off, with traders quickly liquidating their positions.

Despite the economic downturn, in an interview discussing Bitcoin’s role as an alternative asset, Powell reiterated that Bitcoin is not a competitor to the US dollar but to gold. He also addressed the idea of ​​the United States creating a Bitcoin reserve, noting that the Federal Reserve is not allowed to own Bitcoin and is not seeking to change the law.

The broader cryptocurrency market reacted similarly to Bitcoin’s decline, with the major asset seeing significant drops in value. Ethereum, Solana, and Dogecoin were among the hardest hit, as investor sentiment shifted in response to Powell’s comments and the slower path of interest rate cuts expected by the Fed.