Crypto Faces Wave of Liquidations After Fed Announcement!

The crypto market is reeling under the weight of cautious statements from Jerome Powell, the chair of the Federal Reserve. While investors hoped for encouraging signs, Powell reaffirmed a strict position on interest rates, plunging Bitcoin and altcoins into a downward spiral. A wave of liquidations follows, revealing increased nervousness in the face of macroeconomic uncertainties.

The crypto market under pressure: Bitcoin and altcoins in free fall

Powell’s remarks acted like an electric shock to the crypto market. Bitcoin, often considered as a safe haven, lost more than 2% in 24 hours, dropping to $95,000. Altcoins were not spared: Ethereum (-3.76%), XRP, and Solana (-4.78%) follow the trend. Even memecoins like Dogecoin, Shiba Inu, and PEPE are experiencing significant losses.

This widespread selling pressure is accompanied by a rise in trading volume, which has increased by 8% to reach $105.57 billion. An apparent contradiction that highlights the intensity of capital movements. Liquidations in the crypto market have been massive: $44 million for Bitcoin, $30.23 million for Ethereum, and $6.05 million for XRP.

Investors, visibly nervous, are bracing for a scenario of prolonged monetary tightening. High rates make risky assets less attractive, and cryptocurrencies, on the front line, are paying the price.

Macroeconomic uncertainties: the next indicators under surveillance

Powell’s statements are just the tip of the iceberg. Investors are now scrutinizing upcoming economic data, particularly the consumer price index (CPI) and the producer price index (PPI). These indicators could either confirm inflationary fears or provide some respite to the market.

In this context, some cryptos are holding up better than others. Yet, the shadow of the Fed looms. Powell has clearly indicated that a restrictive monetary policy would remain in place until inflation is under control. A perspective that weighs heavily on risky assets, including cryptocurrencies.

The wave of liquidations hitting the crypto market is a brutal reminder of its sensitivity to macroeconomic decisions. Powell’s statements have exacerbated fears, but they have also highlighted the relative resilience of certain projects.

In the short term, everything will depend on the next economic data. A declining inflation could rekindle hope, while stagnation or an increase would prolong uncertainty. Find out, additionally, the miners’ alarm.