Major cryptocurrencies fell on Wednesday after the hawkish approach of the Federal Reserve and the US central bank’s declaration that it has no interest in owning Bitcoin.
| Cryptocurrency | Earnings +/- | Price (recorded at 19:45 ET) |
| Bitcoin (CRYPTO: BTC) | -4.94% | $100,644.84 |
| Ethereum (CRYPTO: ETH) |
-5.81% | $3,648.03 |
| Dogecoin (CRYPTO:DOGE) | -8.26% | $0.3603 |
What happened
Bitcoin It plummeted throughout the day but managed to stay above the psychologically crucial $100,000 level.
Ethereum’s decline was more pronounced as the second-largest cryptocurrency retreated to the $3,600 region following a nearly 6% drop.
The crash triggered more than $675 million in cryptocurrency liquidations in the last 24 hours, with long-term liquidations of $578 million.
The drop came after comments by the Fed Chairman, Jerome Powellduring the press conference following the Federal Open Market Committee meeting, in which he revealed that the central bank cannot own Bitcoin and that he was not seeking a change in the law.
Bitcoin open interest fell 1.1%, however, the number of traders taking long positions in the coin skyrocketed above 50%, indicating expectations of a rebound.
More than $1 billion in short positions were at risk of liquidation if Bitcoin recovers to $105,900.
Market sentiment cooled from “extreme greed” to “greed,” according to the Crypto Fear and Greed Index, signaling a decline in FOMO.
The biggest winners (24 hours)
| Cryptocurrency | Earnings +/- | Price (recorded at 19:45 ET) |
| Pudgy Penguins (PENGU) | +21.82% | $0.03574 |
| Bitget Token (BGB) | +7.95% | $4.24 |
| Monero (XMR) | +0.87% | $214.23 |
The market capitalization of cryptocurrencies worldwide stood at $3.51 trillion, with a drop of more than 5% in the last 24 hours.
Shares fell on Wednesday. He Dow Jones plummeted 1,123.03 points, or 2.58%, to close at 42,326.87, as the index posted its 10th consecutive day of losses. He S&P 500 fell 2.95%, to 5,872.16, and the Nasdaq Composite fell 3.56%, to 19,392.69.
The market suffered despite the last reduction of 25 basis points from the Fed as Chairman Powell hinted at a more cautious stance in 2025, with just two more 0.25% rate cuts planned for next year, compared to four forecast in September.
The 10-year Treasury yield jumped to 4.5%, the highest level since early June, as risk sentiment evaporated.
Analyst Notes
The cryptocurrency analyst and trader Ali Martinezvery often, commented on the US central bank’s policy change, stating that 2025 looks “much less positive.”
“For now, stay calm, don’t panic sell, and remember: markets like uncertainty, but they also thrive on it when the dust settles. Let’s see how the situation evolves from here,” Martinez advised operators.
In his analysis of the Fed’s action, Ali said: “It wasn’t today’s 25 basis point cut that sent markets into chaos; was the realization that inflation could last longer and that the Fed is not prepared to let go of the accelerator. Sentiment is changing and suddenly 2025 looks a lot less positive.
What’s the deal with today’s market chaos?
The Fed went ahead with a predictable 25 bps rate cut. No surprises there—97% of people expected it. But then, Bitcoin tanked around $100,000. Why? Let me explain without the usual Fed jargon.
—————————-
This is a glimpse of the premium… pic.twitter.com/wANPW4t2uV
— Ali (@ali_charts) December 18, 2024
Another well-known analyst, Rekt Capitalnoted Bitcoin’s daily close above $100,000, but warned that it was not enough.
“However, for BTC to go up from here, it would have to claim ~$101,000 as support, just like it did on December 14. Otherwise, $101,000 could become new resistance, which could mean that the downward movement is not over,” the analyst stated.
Ultimately, BTC has Daily Closed above $100k
However for BTC to move up from here, it would need to reclaim ~$101k (red) as support, much like it did on December 14th
Otherwise, $101k could turn into new resistance which could mean the downside isn’t over$BTC #Crypto… https://t.co/964IqYsdpo pic.twitter.com/mxhL04PnsH
— Rekt Capital (@rektcapital) December 19, 2024
Photo courtesy of Shutterstock
You can also read: Ibex 35 futures lead falls: How do the Fed’s decisions impact Europe?
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