Bitcoin has fallen 2.5%, with Ethereum, XRP, and Solana dropping by up to 4%. This decline follows hawkish Federal Reserve commentary on rate cuts and inflation targets. Bitcoin has corrected 10% from its peak and faces a crucial few days ahead.

On the cryptocurrency market, Bitcoin has experienced a decline of 2.5%, accompanied by significant drops in altcoins such as Ethereum, XRP, and Solana, which fell by up to 4%. This downturn is largely attributed to recent hawkish statements from the Federal Reserve, which indicated that a modest rate cut is projected for 2025 and confirmed that the 2% inflation target is unlikely to be met in the near future.

Following an impressive rally post the election of President Donald Trump, Bitcoin’s price has retreated by 10% from its all-time high of $108,268.45. The current market capitalization has dipped below $1.9 trillion, placing Bitcoin at a pivotal moment where its ability to regain momentum will be tested in the upcoming days. Shekhar noted the importance of caution as Bitcoin’s resilience is well-documented, despite ongoing price consolidations.

The current fluctuations in the cryptocurrency market are closely tied to macroeconomic signals, particularly those communicated by the Federal Reserve. Investors are reacting to the possibility of a slower rate cutting process, which may influence risk appetite across financial assets, including cryptocurrencies. Historically, the crypto market is known for its volatility, and the recent corrections in prices reflect broader economic concerns that frequently impact market sentiment. A notable correlation with the S&P 500 further highlights the interconnectedness of cryptocurrency prices with traditional economic indicators.

In summary, the cryptocurrency market is currently experiencing a notable downturn, primarily driven by external economic influences from the Federal Reserve. As major cryptocurrencies like Bitcoin, Ethereum, and Solana witness significant declines, investors are urged to remain vigilant. Despite the challenges, long-term predictions remain optimistic, suggesting potential recovery and growth in the future.

Original Source: economictimes.indiatimes.com

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