In a dramatic turn of events, Bitcoin, the leading cryptocurrency, plunged below the $25,000 mark for the first time in three months, rattling the crypto market. The drop, which occurred on June 15, saw Bitcoin’s value plummet by 4% in just 30 minutes, sliding from $25,867 to $24,819. As of the latest update, Bitcoin is teetering just above the $24,985 mark, with investors and enthusiasts watching nervously.
This sharp decline in Bitcoin’s value is particularly noteworthy given the relative stability it had maintained at around $26,000 over the preceding week. This stability was sustained even in the face of regulatory turmoil, including SEC lawsuits targeting major cryptocurrency exchanges like Coinbase and Binance. It’s worth noting that during this period of regulatory scrutiny, Binance users withdrew over $780 million in just 24 hours.
The Timing and Impact of the Fed’s Announcement
The timing of this Bitcoin plunge is significant. It occurred approximately three hours after the Federal Reserve made a pivotal announcement regarding interest rates. The Federal Reserve, after nearly 15 months of consecutive rate hikes to combat inflation, revealed a temporary pause in its interest rate hikes. This decision sent shockwaves through the cryptocurrency market.
According to Josh Gilbert, a market analyst at eToro, Federal Reserve Chairman Jerome Powell’s message was clear: the pause in rate hikes is temporary and could potentially spell more significant challenges for Bitcoin in the long term. Gilbert noted that the positive market sentiment seen earlier in the year, driven by expectations of declining inflation and peaking interest rates, might face headwinds.
Ether and Altcoins Feel the Impact
Bitcoin’s woes were not confined to the flagship cryptocurrency alone. Ether, the second-largest digital coin by market capitalization, witnessed a drop of more than 5%, plummeting from $1,727 to $1,631 within the same timeframe.
Altcoins, too, experienced a bearish sentiment. Several tokens, particularly those labeled as securities in the SEC lawsuit, faced declines of around 3%. Cardano, for instance, saw a 3.4% drop in the past 24 hours, while Polygon and Solana recorded decreases of 3.3% and 2.8%, respectively.