Why Did Crypto Collapse Today? Jerome Powell's Speech Caused Panic Selling

The Federal Reserve yesterday announced a 0.25% interest rate cut, as expected. At the press conference held to announce the interest rate cut, Fed Chairman Jerome Powell defended the decision, describing it as an effort to achieve a more balanced economic position. However, he revealed that the organization will take a cautious approach when considering further interest rate cuts. Yesterday, both the U.S. stock market and the cryptocurrency market experienced significant declines. The Federal Reserve’s Target for Interest Rates and Inflation: What You Need to Know Yesterday, the interest rate of the Federal Reserve was lowered to 4.5%. This is the third significant adjustment this year. Initially, on September 18, the interest rate was reduced to 5%. On November 7, the interest rate was lowered for the second time to 4.75%.

During the press conference, Powell emphasized the organization’s commitment to supporting the domestic economy and job market. However, he stressed that the organization has not yet decided on a detailed plan to change interest rates, stating that the possibility of further interest rate cuts depends on three key factors: new economic data, economic outlook, and risks to the economy and inflation.

At the beginning of this year, the inflation rate in the United States was 3.1%. It reached its peak of 3.5% in March. It is worth noting that from March to September, it steadily declined. In September, it dropped to its lowest point of the year at 2.4%. However, since then, the rate has been steadily increasing. In November, it reached 2.7%. Market Reaction: Stocks and Cryptocurrencies Plummet On December 18, the US Federal Reserve officially announced a cut in interest rates, causing the cryptocurrency market to drop by about 0.58%. At the beginning of yesterday, the price of Bitcoin was at $106,080.05. By the time it closed, the price had dropped to a low of $100,207.97, marking a significant decrease of 5.85%. Similarly, the S&P 500 index also dropped by more than 2.90% yesterday.

Altcoin Faces Bigger Challenges On the morning of December 18, the total market capitalization of the cryptocurrency market excluding BTC was $1.53 trillion. By the time the market closed, it had dropped to a low of $1.42 trillion, marking a significant decrease of 7.74%. Over the past 24 hours, Ethereum has decreased by over 4.7%, XRP by 6.8%, BNB by 1.6%, Solana by 3.3%, Dogecoin by 6.2%, and Cardano by 4.9%. DYOR! #Write2Win #Write&Earn $BTC {spot}(BTCUSDT)