TLDR
- Bitcoin, Ethereum, XRP, and Dogecoin see sharp declines.
- Federal Reserve’s cautious outlook on future rate cuts is one cause.
- Bitcoin dropped below $94,000.
- Ethereum fell to $3,300.
- The total market cap is now $3.3 trillion, the lowest in a month.
- $300M liquidations when investors were forced to sell at a loss.
- Fear and Greed Index shifts to neutral.
We are seeing a major crash in the cryptocurrency market today after notable coins like Bitcoin, Ethereum, XRP, and Dogecoin have decreased in value. One reason behind this downturn is the future outlook announced by the Federal Reserve. Although the Federal Reserve cut interest rates by 0.25%, they have expressed a cautious outlook on the future rate cuts.
The caution has unsettled many investors who are now afraid of buying cryptocurrencies. Federal Chair Jerome Powell has shared that investors can only expect about two rate cuts in 2025.
Following these policies, major cryptocurrencies drastically decreased in value. The value of Bitcoin dropped below $94,000, whereas Ethereum fell to $3,300 at the time of this writing. The total market capitalization of cryptocurrencies has also decreased to $3.3 trillion, which is the lowest level in a month.
This market shift has led to $300 million in liquidations. This is because investors who thought prices would rise were forced to sell at a loss. The market has shifted against them, and money is getting harder to come by globally, so unpredictable bond markets are definitely making things worse for risky investments like cryptocurrency.
People are now much more cautious, so they do not invest easily. This shift is only demonstrated in the Fear and Greed index which has completely moved to a more neutral zone.
Market Sentiment and Liquidations
- Fear and Greed Index: Market sentiment has shifted from extreme greed to a neutral zone, which means there is hesitation among investors.
- Liquidations: Leveraged long positions in BTC and ETH bore the brunt, with $42M and $19M, respectively, liquidated.
Bitcoin (BTC)
- Support Levels: $93,500 (current) and $92,000 (psychological).
- Resistance Levels: $100,000 and $108,000 (all-time high).
Ethereum (ETH)
- Support Levels: $3,000 (200-day EMA).
- Fibonacci Levels: Testing 61.8% retracement, hinting at possible recovery.
Dogecoin (DOGE)
- Current Status: Testing $0.30 support; a break below could push it to $0.22.
- Challenges: Network vulnerabilities and decreased transaction volume aggravates declines.
XRP
- Support Levels: Holding at $2.20, with $2.00 as critical psychological support.
- Bullish Forecasts: Analysts predict XRP could reach $973 by 2025.
