Cryptocurrency prices soared, with major coins such as Dogecoin (DOGE), Solana (SOL), Cardano (ADA), and Ethereum (ETH) leading the losses amid a widespread market sell-off triggered by the Federal Reserve’s latest economic outlook. It crashed this Friday night.
Jump into cryptocurrency price adjustment
Bitcoin and other major cryptocurrencies have given up significant recent gains as markets continue to adjust following the Federal Reserve’s updated economic outlook.
Bitcoin (BTC) fell to $95,875 on Friday, down sharply from Tuesday’s high of $108,268. The top cryptocurrency fell 4.6% in the last 24 hours, but several other high-value cryptocurrencies recorded much steeper losses.
Dogecoin (DOGE), the top meme cryptocurrency, had the steepest decline, down 15% to $0.3066, according to CoinMarketCap data. This is a 34% decline from the 2024 high of $0.47.
Solana (SOL) is down nearly 13% and is currently trading at $182, while Cardano (ADA) is down 12.3% and is currently trading at $0.85. Ethereum (ETH) has also fallen nearly 10% over the past 24 hours and is currently trading at $3,297.
The market correction caused the overall cryptocurrency market value to decline by 6.75%, reaching $3.28 trillion. According to CoinGlass data, $1.17 billion was liquidated from long and short positions in the last 24 hours, with Bitcoin leading the liquidation at $241 million.
The steep market losses come after Fed Chairman Jerome Powell’s announcement sent shockwaves through financial markets as he highlighted expectations of higher-than-expected inflation and rising unemployment in 2025.
The Federal Reserve cut interest rates by 0.25% but took a more cautious stance, unnerving investors by signaling that there would be no further cuts soon.
Mr. Powell acknowledged that inflation had made some progress, but slower than expected. The Fed’s updated forecast predicts just two rate cuts in 2025, up from the three previously expected.
On the flip side:
- The cryptocurrency market is maintaining a bullish trend, with prices rising to relatively high levels. Corrections during bull markets are normal and healthy and often provide buying opportunities.
- US President-elect Donald Trump has pledged to establish Bitcoin reserves and create a supportive regulatory environment for the cryptocurrency, paving the way for more capital to flow into the market.
Why This Matters
These market corrections highlight the ongoing volatility in the cryptocurrency space, which is influenced by broader economic factors such as inflation and the Federal Reserve’s stance on interest rates. However, it also highlights the resilience of the cryptocurrency market, with healthy corrections providing potential opportunities for investors.
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