Bittime - On December 18, 2024,the Federal Reserve (Fed) announced a 25 basis point cut in its benchmark interest rate, the third consecutive cut in 2024.
However, the announcement also conveyed that additional interest rate cuts in the future were inevitable.
Fed Cuts Rates by 25 Basis Points
This decision has lowered the federal funds interest rate to 4.25% from the previous 4.50%.
While inflation remains slightly above the central bank's target, it has fallen significantly from the 40-year peak reached during the pandemic.
Also read: FOMC Meeting Results for December 2024 for 2025, Here's What's Inside!
Impact of FOMC Decision on Crypto Market
While this rate cut announcement was expected, the overall crypto market still experienced a decline before and after the Fed announcement.
Will the Crypto Market Recover?
According to Coinmarketcap, the overall crypto market experienced a decline of 2.62%.
Sumber: coinmarketcap
Meanwhile, major cryptos like Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL) saw their prices drop by more than 2.65%, 2.30%, 4.69%, and 5.15% respectively in the last 24 hours.
Comments from Jerome Powell
In the meeting, Fed Chairman Jerome Powell stated that the Fed is not allowed to own Bitcoin.
These comments could have a significant impact on the crypto market and could lead to a price drop in the future.
Santiment's Analysis of the Crypto Market
According to blockchain analytics platform Santiment, crypto and stock markets reacted negatively to the Federal Open Market Committee (FOMC) rate cut announcement.
However, the concern stems not from the current rate cuts, but from Powell's announcement that 2025 will only see half the number of rate cuts previously expected.
Altcoins Experience Double Dip
Powell's announcement had a negative impact on the crypto sector. Bitcoin fell 2.85% in 24 hours, but altcoins saw a bigger drop.
Ethereum (ETH) fell 4.7% to around $3,600, while XRP and Dogecoin (DOGE) fell 6.3% and 6.22% respectively. The overall crypto market cap fell 3.44% to $3.5 trillion.
Also read: 4 Key Themes of Ripple's Annual Swell Conference
Santiment's Latest Altcoin Market Report
Santiment's report also highlights significant losses in altcoins:
- Avalanche (AVAX) : Turun 8.17%
- Chainlink (LINK): Turun 9,31%
- Litecoin (LTC) : Down 11.40%
- Polkadot (DOT) : Down 7.44%
Market Indicators
Market indicators show mixed signals.
The daily Relative Strength Index (RSI) for non-Bitcoin and non-Ethereum assets is at 50, indicating a balance between buyers and sellers.
A slight uptrend on the RSI suggests a potential rebound.
Sumber: TradingView/@CoinEdition
Conclusion
The Fed's rate cut announcement has had a significant impact on the crypto market.
Although a rate cut is expected, comments from Jerome Powell have caused concern among investors.
Altcoins have experienced a double dip, but market indicators are showing mixed signals.
Will the crypto market recover? Only time will tell.
FAQ
What is FOMC?
The FOMC (Federal Open Market Committee) is a committee responsible for regulating monetary policy in the United States, including determining interest rates and the amount of money circulating in the market.
How do interest rates work?
Interest rates are the fees charged to borrowers for using money lent by the central bank. Higher interest rates can make borrowing more expensive, while lower interest rates can make borrowing cheaper.
What impact does the FOMC decision have on the crypto market?
The FOMC decision can have a significant impact on the crypto market, as changes in interest rates can affect crypto prices. If interest rates increase, then crypto prices can decrease, as investors prefer to lend their money at higher interest rates.
What is Bitcoin?
Bitcoin is the most popular and most valuable crypto in the crypto market. Bitcoin can be used as a means of payment, investment, and storage of value.
How to Buy Crypto on Bittime
Want to trade and buy Bitcoin and invest in crypto easily? Bittime is ready to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures that every transaction is safe and fast.
Start by registering and verifying your identity, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!
Check BTC to IDR , ETH to IDR , SOL to IDR and other crypto assets rates to find out today's crypto market trends in real-time on Bittime.
Also, visit Bittime Blog for interesting updates and educational information about the crypto world. Find trusted articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your knowledge in the crypto world.
Reference
Chandan Gupta, Fed’s Third Rate Cut of 2024, Will It Revive XRP and Bitcoin Prices?, Diakses 19 Desember 2024
Parth Dubey, FOMC’s Projections Hammer Altcoins, Bitcoin Drops to $100K, Diakses 19 Desember 2024
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