BTC was recently trading at about $25,171, off 3.1% over the past four hours, part of a wider crypto selloff. The largest cryptocurrency in Market value had been traveling comfortably just below $26,000 for much of the past five days as markets awaited the latest interest rate decision by the U.S. central bank and continued to chew over last week’s U.S. Securities and Exchange lawsuits against crypto exchanges Binance and Coinbase.
The Federal Reserve elected to suspend rate hikes, but comments by bank Chair Jerome Powell following the announcement appeared to spook markets. Powell reiterated the Fed’s commitment to sink annual inflation to a target 2.5%. It currently stands at 4%. But critics of bank policy say that the focus on prices risks sending the economy into a recession.
Just as equity markets were closing a lackluster day, digital assets plunged. Ether, the second largest crypto by market cap, fell to $1,630 before regaining ground to hover near $1,654, off 5.1% from Tuesday, same time.
In an email to CoinDesk, Ruslan Lienkha, chief of markets at Web3 crypto and fiat service provider YouHodler, wrote that bitcoin’s late plunge did not necessarily foreshadow a larger downturn. “We have to remember that the crypto market is a relatively small market, and a few hundred million dollars can move the market for a few percent,” Lienkha wrote. “So let’s see the following days if it is really a downward trend or just a single whale sell off.”
And in a follow-up comment to an earlier note to CoinDesk, Markus Levin, co-founder of blockchain geospatial network XYO Network, wrote that despite the Fed’s hawkish, post-announcement comments, he believed that has “bottomed already for” its current “four-year cycle.”
“But nothing is certain in this market, especially when it comes to crypto,” he added. For example, if we do enter recession territory, then we should be prepared for even more unpredictable movements with Bitcoin and other assets that are further along the risk curve.”
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