Crypto Market Faces Sharp Decline as Bitcoin Drops Near $93,000

Crypto Market Capitalization Drops 11% in 24 Hours: What’s Behind the Decline?

Crypto Market – A broad crypto market slide intensified at the start of U.S. trading hours, with Bitcoin (BTC) nearing the $93,000 level, triggering a fallback across major cryptocurrencies. According to recent data, Ether (ETH), Solana’s SOL, Cardano’s ADA, XRP, and BNB all saw declines of up to 16%. Meanwhile, Dogecoin (DOGE), the popular memecoin, plunged by more than 27%. The total crypto market capitalization has dropped by over 11% in the past 24 hours, marking one of the most significant single-day losses of the year.

Fed’s Hawkish Tone Drives Market Sentiment

The recent downturn in the market can be partly attributed to the hawkish tone in this week’s Federal Open Market Committee (FOMC) meeting. Traders are adjusting their expectations after the Federal Reserve’s outlook for the upcoming year fell short of expectations. While a rate cut was already anticipated, the Fed signaled only two cuts instead of the previously expected four, leading to a shift in sentiment as markets adjust to a less optimistic economic forecast.

Jeff Mei, COO at crypto exchange BTSE, commented on the situation, noting, “The Fed rate cut itself was already expected and priced in, but the Fed’s outlook for next year, which includes only two cuts instead of four, has raised concerns.” He went on to advise traders to remain cautious until inflation is under control and more concrete U.S. policies emerge in the coming year.

Long-Term Outlook: Liquidity Boost for Crypto Markets

Despite the short-term pullback, Mei remains optimistic about the future of crypto. He believes that both monetary and fiscal stimulus policies in the U.S. and globally will eventually boost liquidity, benefiting the crypto market, particularly Bitcoin, which is increasingly seen as a safe-haven asset akin to gold. The long-term outlook suggests that these policies will help drive growth in the cryptocurrency sector.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.