Fed's 25 bps Rate Cut Triggers Sharp Selloff in Bitcoin, Ethereum, XRP, and Solana

Source: CoinEdition Original Title: Should You Buy the Dip? Analyzing the Crypto Market Crash After Fed’s 25 bps Cut Original Link:

Fed Delivers Third 25 Bps Cut As FOMC Vote Splits 9 To 3

The U.S. Federal Reserve cut its key policy rate by 25 basis points on Wednesday, marking the third reduction this year. Fed Chair Jerome Powell said the Federal Open Market Committee (FOMC) lowered the target range by 0.25 percentage point to support its employment and inflation goals after weighing current risks in the economy.

Details of the decision process reveal a 9-3 vote split between members of the decision-making committee, featuring hawkish and dovish dissents. Meanwhile, Powell reiterated the committee’s commitment to achieving its dual mandate goals of maximum employment and stable prices.

Following Powell’s assurances, particularly noting that the latest interest rate reduction puts the government in a comfortable position, U.S. stock prices surged, with the Dow Jones Industrial Average adding 500 points.

However, the Fed Chair didn’t provide much information about what to expect in January, noting that the FOMC will react after observing the economy’s performance.

Fed Rate Cut Triggers Selloff In Bitcoin, Ethereum, XRP, Solana

In the meantime, major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana, crashed following the latest FOMC press statement.

Bitcoin, which showed bullish momentum earlier on Wednesday, flipped lower and dropped nearly 3% into the close. The decline extended into Thursday morning with another 3% slide, leaving BTC near $90,057.

Ethereum reversed sharply as well. The second-largest crypto gave back an intraday gain close to 5% following the Fed’s latest decision.

The downward slide continued on Thursday morning with an additional 4% decline, leaving the price at $3,197 at the time of filing this report.

XRP followed a similar pattern, losing approximately 5% of its value over the last 24 hours, sliding alongside Bitcoin and Ethereum as traders reacted to the rate cut and Powell’s comments about the economic outlook.

Volatility picked up across large caps as short-term positioning reset after the statement and press conference.

Solana’s case is similar to those of the cryptocurrencies already mentioned, highlighting an industry-wide pullback in digital asset prices. The scalability-focused crypto reversed its movement on Wednesday after reaching a $142.62 daily high. The cryptocurrency traded for $131.06 at the time of writing, reflecting a 9% pullback following the latest interest rate cut.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Readers are advised to exercise caution before taking any action related to the content.