Key takeaways
- Bitcoin price fell below $100,000 due to the Federal Reserve’s hawkish stance.
- Meme tokens saw sharp declines amid market liquidation.
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Bitcoin fell nearly 6%, trading below $100,000 amid a market-wide sell-off after the Fed took a hawkish tone at Wednesday’s FOMC meeting, according to data from CoinGecko.
The Fed cut its benchmark interest rate by 25 basis points as expected, but expects only two rate cuts in 2025, down from four previous forecasts. Fed Chairman Jerome Powell indicated that the central bank would be more cautious when considering further adjustments to its key rate.
The Fed’s surprisingly hawkish stance has prompted analysts to adjust their rate cut forecasts. Analysts at Morgan Stanley have indicated that they no longer expect a rate cut in January 2025.
Likewise, market expectations for a rate cut at the January Fed meeting have diminished. The probability of a rate cut at the Fed’s January meeting fell to 8.6%, according to data from the CME FedWatch Tool, while the probability of maintaining current rates rose to 91%, from around 81% a day earlier.
Stock and crypto markets reacted strongly to Powell’s hawkish signals. The Nasdaq fell more than 3% and the Dow recorded its longest losing streak in 50 years. The dollar hit a two-year high as bond yields rose across the curve.
Bitcoin briefly lost $5,000 during Powell’s speech and fell to $98,900 late Wednesday before climbing back above $100,000. Other crypto assets also declined, with Ethereum falling more than 5% to $3,600, Ripple falling almost 9% and Dogecoin falling 8%, according to CoinGecko data.
Meme tokens saw the biggest 24-hour declines, with Popcat (POPCAT) down 20% and Peanut the Squirrel (PNUT) down 19%. Other meme coins, including Pepe (PEPE), dogwifhat (WIF), Bonk (BONK), and Floki (FLOKI), all saw double-digit losses.
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