Crypto Market Takes a Hit as Bitcoin Approaches $93K, Altcoins Suffer Significant Losses
The cryptocurrency market experienced a significant downturn as U.S. trading hours commenced, with Bitcoin (BTC) nearing the $93,000 threshold, triggering a broad sell-off across major cryptocurrencies. Ether, Solana’s SOL, Cardano’s ADA, XRP, and Binance Coin (BNB) all fell by up to 16%, while Dogecoin (DOGE) saw a dramatic decline of more than 27%. Over the past 24 hours, the total market capitalization of cryptocurrencies has dropped by over 11%, making it one of the worst single-day declines of the year.
Market analysts point to a more hawkish tone from this week’s Federal Open Market Committee (FOMC) meeting as a factor driving the shift in market sentiment, leading to increased caution ahead of the new year.
“The rate cut by the Fed was largely expected, but the real market shift came from the central bank’s economic forecast for 2024. Instead of the four rate cuts that were previously anticipated, only two were forecast, which has made traders more cautious,” said Jeff Mei, COO of crypto exchange BTSE, in a Telegram message to CoinDesk. “Traders should exercise caution until inflation is under control and more clarity emerges on the fiscal and monetary policies for the coming year.”
Despite the recent setback, Mei is optimistic about the long-term outlook for crypto markets. “With ongoing global fiscal and monetary stimulus, liquidity is expected to increase, which will eventually support the growth of the crypto market. Bitcoin, in particular, could benefit as it continues to establish itself as a safe haven asset, much like gold,” he added.
