Last night, the final FED interest rate decision for 2024 was announced and a 25 basis point cut was made in line with expectations.
However, FED Secretary Jerome Powell's hawkish statements led to a decline in Bitcoin and altcoins.
BTC fell below $100,000 but recovered to rise above $100,000 in the early Asian session.
Apart from BTC, altcoins such as XRP, Dogecoin (DOGE) and Solana (SOL) experienced declines of up to 5.5 percent, while BNB and Ethereum (ETH) experienced relatively less declines.
Are Powell's Bitcoin Statements the Reason for the Decline?
These declines were triggered by Powell’s hawkish statements as well as his response to a question about whether he would join Donald Trump’s Bitcoin reserve promise.
Powell said the Fed does not intend to participate in any government plans to create a strategic bitcoin reserve, and that board members do not intend to amend the Fed law. “That's the kind of thing Congress should consider, but we're not planning to amend the law,” Powell said.
Following Powell's statements, Bitcoin and altcoins fell, while leveraged transactions also saw major liquidations.
According to Coinglass data, $780 million was liquidated in leveraged transactions in the last 24 hours, $659 million of which was from long positions and $120 million from short positions.
While 269,507 investors liquidated in the last 24 hours, the largest liquidation occurred in an ETH/USDT transaction worth $7.10 million on Binance.
Commenting on the FED's interest rate cut and the decline in Bitcoin, LVRG Research analyst Nick Ruck said that Powell was behind the decline.
“An interest rate cut would normally be a bullish reaction for Bitcoin and the cryptocurrency market because it was widely expected, but the market reacted strongly after Fed Chair Jerome Powell said inflation would be a continuing problem throughout the next year.
Powell also said that the Fed does not intend to participate in any government plans to create a strategic Bitcoin reserve.
At this point, if the US Bitcoin strategic reserve is no longer among the plans, BTC and cryptocurrencies may have reached their peak.
Trump's Bitcoin promise helped fuel the rally that has reached all-time highs in recent months.”
Bitcoin continues to trade at $101,395 at the time of writing.
*This is not investment advice.
