Investors are on the edge as the crypto market experiences a significant selloff just ahead of the crucial Federal Open Market Committee (FOMC) interest rate decision. Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, and Cardano (ADA) are under pressure, with Bitcoin struggling to maintain stability above the $43,000 mark.
Meanwhile, several analysts attribute this downturn to speculation surrounding the impending announcement from the U.S. Federal Reserve, which has the potential to sway not only the traditional financial markets but also the cryptocurrency landscape.
According to Coinglass, the crypto market saw a total liquidation of $150 million in the last 24 hours, with $110 million in longs liquidated. BTC, ETH, SOL, XRP, SUI, and ORDI longs bleed in the liquidation. In the past 24 hours, 57K traders were liquidated with the total liquidation of $78.97 million. The largest single liquidation order liquidation of ETH-USD-SWAP valued at $2.67 million happened on crypto exchange OKX.
Investors Take Pause Ahead Of FOMC
As the crypto market faces a downturn, all eyes are on the FOMC decision, scheduled for later today. Market analysts suggest that the recent dip may be tied to speculation about the U.S. Federal Reserve’s announcement, which could have far-reaching consequences. The flagship cryptocurrency, Bitcoin, is currently grappling with volatile trading and struggling to stay above the $43,000 mark.
Meanwhile, the dip is likely a response to uncertainties about the Federal Reserve’s actions, with the potential to impact global financial markets, including cryptocurrencies. The market sentiment is tense as investors brace for the FOMC decision, with the CME FedWatch Tool indicating a 97.9% probability of the Federal Reserve maintaining the current interest rate. However, the real focus is on Fed Chair Jerome Powell’s speech, as investors seek clues about future monetary policy.
Despite recent signs of cooling inflation, it remains above the Fed’s 2% target range. Analysts believe that a dovish comment from the Federal Reserve could trigger a bullish run in both traditional and cryptocurrency markets. Conversely, any other move at the upcoming FOMC might exacerbate the ongoing market sell-off.
Notably, the Federal Reserve had held the interest rate steady at 5.25%-5.5% for three consecutive meetings in December 2023. Now, the market is anticipating three rate cuts of 75-100 basis points in 2024.
As reported by CoinGape Media earlier, BlackRock’s macro expert foresees potential Fed rate cuts in June, given the resilience displayed by the U.S. economy in recent PCE inflation, jobs, and retail sales data. On the other hand, Morgan Stanley’s Andrew Slimmon emphasizes Powell’s patience, stating that the strong economy allows the Fed to take a cautious approach and verify the true secular trend in inflation.
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How’s The Crypto Market Performing?
The global crypto market cap retreated 2.44% from yesterday to $1.63 trillion, while the last 24-hour trading volume surged 10.75% to $59.84 billion. Notably, the fear and greed index in the crypto market was at 57, suggesting a neutral sentiment in the segment amid FOMC speculations.
Meanwhile, the Bitcoin price was down 2.18% to $42,476.67 as of writing, while its trading volume soared 3% to $23.51 billion. Simultaneously, the second largest crypto by market cap, Ethereum price dropped 1.07% to $2,288.43 at the same time.
The BNB price lost 2.7% and traded at $302.14, while the Solana price decreased by 5.97% to $98.20 during writing. On the other hand, the XRP price was down 5.98% to $0.5047, and the Cardano price plunged 5.40% to $0.4987. The scenario in the meme coin segment was also gloomy, as witnessed by the dip in both Dogecoin and Shiba Inu prices.
Meanwhile, as uncertainty prevails ahead of the FOMC, the U.S. Dollar Index Futures rise slightly, while the 10-year bond yield dips, creating a complex backdrop for investors worldwide. The crypto market, already under pressure, is set for a potentially transformative moment with the impending FOMC decision.
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