The whole world seems to be waiting for the upcoming rate decision by the US Federal Reserve, and top crypto projects are no exception. Bitcoin (BTC) and Ethereum (ETH) experienced a bearish start to the week on Monday as they declined by up to 5%.
According to the US media reports, Bitcoin plunged by over 3% to $58,255.25, whereas Ethereum slumped to as low as $2,259.64 in the wee hours of Monday. Analysts attributed the latest price slump for the two crypto heavyweights to the widely-anticipated Fed Rate cut, which is set to influence market sentiments in crypto, stocks, and forex.
A Promising Weekend for Bitcoin, Ethereum, and their ETFs
The exchange-traded funds (ETFs) for both Bitcoin and Ethereum had a decent outing over the weekend. The US-listed Bitcoin ETFs welcomed inflows of more than $263 million on Friday, the highest since July 22. Similarly, Ethereum ETFs also witnessed inflows worth $1.5 million, the second straight day of inflows. The inflows showcased continued investor interest in crypto assets amid the US Elections 2024 and other external factors.
Bitcoin price stayed mostly above $60,000 during the weekend, boosted by promising US data. However, it all changed Monday morning when Asian exchanges recorded major bearish trends as investors offloaded their holdings ahead of the major decision by the Federal Reserve.
Ethereum was no stranger to bearish sentiments on Monday morning as ETH price plummeted by 5.5% in a 24-hour circle. CoinGecko data suggested that it was the Ethereum price’s worst one-day slide since early August. Similarly, Cardano’s price also fell 5%, Solana’s price plunged 4%, while BNB Chain lost 1.1%.
A Silver Lining Amid Chaos
While crypto heavyweights were scuffling with bearish price movements, all was not red. CKB and a few others managed to stay green amid the chaos. CKB jumped by 10.5% in 24 hours, largely due to the positive sentiment following its listing on the Korean exchange Upbit, which is known for having users with a keen interest in meme coins.
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All Eyes on US Federal Reserve
Traders expect the Federal Reserve to make its first rate cut in more than four years. If the US Federal Reserve cuts the key rate, the crypto market is likely to turn green. According to the crypto betting platform Polymarket, 51% of people anticipate the US Federal Reserve to cut its key rate by 50 basis points, whereas 48% of others expect a 25 basis points cut. The remaining 2% expect no change in the key US rate.
Historical Impact of the US Fed Rate Decisions
The rate moves by US Federal Reserve has had major implications on crypto, forex, and stock markets over the years. A scenario for lower borrowing costs generally gives rise to bullish sentiments in the markets as cheaper access to capital sparks interest in riskier sectors.
This means Bitcoin and Ethereum may return to bullish ways shortly after the Federal Reserve’s decision. Many analysts are hinting at Bitcoin breaching the much-hyped $100,000 before the end of the year. The first-rate cut in over four years might prove to be the trigger Bitcoin might need at this stage.
The Final Word
The week got off to a bearish start, with all the major cryptos, Bitcoin, Ethereum, Cardano, Solana, and Binance moving south. Investors and traders are keeping a close look at the US Federal Reserve which is anticipated to cut its key rate for the first time in more than four years. While the majority believe it will cut the rate by 50 basis points, many others anticipate the US Federal Reserve will reduce its key rate by 25 basis points. Nobody can write off the possibility of a no change in key rate at this stage.
Amid all the anticipation, all eyes are on the US Federal Reserve. If it cuts the rate by 50 basis points, Bitcoin and Ethereum prices are set to rebound, giving traders a big chance to make immediate gains. However, if the rates are kept unchanged, the crypto prices are set to nosedive further. Stay tuned to TheBITJournal for more updates on the US Federal Reserve’s rate decision and its impact on crypto prices.
The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. The Bit Journal does not guarantee the accuracy, completeness, or reliability of any information provided in the price predictions, and we will not be held liable for any losses incurred as a result of relying on this information.
Investing in cryptocurrencies carries risks, including the risk of significant losses. Always invest responsibly and within your means.
