The Federal Reserve has recently reduced interest rates by 25 basis points, leading to notable ramifications in the cryptocurrency market. Bitcoin (BTC) fell below the critical threshold of $100,000, prompting significant sell-offs across various digital assets. Major altcoins, including Ethereum (ETH) and XRP, also faced considerable declines in value due to this shift.
What Happened to Bitcoin and Major Altcoins?
In the wake of the rate adjustment, Bitcoin’s value decreased by 4%, trading at approximately $100,880. It saw intraday fluctuations, hitting lows of $98,874 and highs of $105,389. The total market capitalization dipped to $2 trillion, with trading volumes around $100 billion. Ethereum experienced a more severe drop of 6%, falling to $3,652, while XRP plummeted by 10%, disappointing its core supporters.
Why Is Trading Volume Rising Despite Declining Market Cap?
Despite a 5% decrease in overall market capitalization to $3.44 trillion, trading volume surged by 40%, hitting $251 billion. This suggests a high level of trading activity persists in the market, with the Fear and Greed Index holding steady at 69, indicating robust investor appetite for risk.
Reports indicate that Bitcoin ETFs experienced an $84 million outflow, with Grayscale leading at $35 million and Invesco following with $25 million. The precise figures for BlackRock are not yet available.
Recent developments in the cryptocurrency market showcase a volatility trend driven by the Fed’s interest rate adjustments. Significant points include:
- Bitcoin fell below $100,000, with a notable 4% decrease.
- Ethereum and XRP recorded declines of 6% and 10%, respectively.
- Trading volume rose by 40%, indicating active market participation.
- Bitcoin ETFs faced substantial outflows, totaling $84 million.
The current state of the cryptocurrency market reflects a complex interplay of interest rates and trading sentiments. As market players navigate these fluctuations, future movements will likely hinge on the Fed’s ongoing policies and forthcoming project developments.