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Federal Reserve Chairman's hawkish comments cool the cryptocurrency market, causing Bitcoin to fall by 2%

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Federal Reserve Chairman

Jerome Powell, the Chairman of the Federal Reserve, delivered a prepared speech at a conference in Dallas, Texas, hinting that the Fed is not inclined to cut interest rates in the near term. Powell stated, "The current economy has not shown any urgent need for a rate cut, and the resilience of the economy allows us to make decisions more cautiously." This hawkish stance caught the market off guard and weakened expectations for a rate cut.

Bitcoin Drops, Other Major Cryptocurrencies Follow Suit

Following comments made by Powell, the major cryptocurrency market experienced volatility. The price of Bitcoin (BTC) quickly dropped by 1.5% to $88,000 from $88,300 after Powell's remarks, with a 3.2% decrease within 24 hours. Another major cryptocurrency, Ethereum (ETH), also saw a similar decline. However, the CoinDesk 20 Index rose by 0.5% against the trend due to a 13% increase in Ripple's XRP. There are rumors circulating that SEC Chairman Gary Gensler may quietly resign due to Trump's election, which may be a key factor driving the rise in Ripple.

Rate Cut Probability Declines, Market Sentiment Dampened

According to CME FedWatch data, after Powell's statement, the market's expectation of a December Fed rate cut significantly decreased from 83% the previous day to 62%. As a result, market sentiment has been suppressed, affecting both the cryptocurrency and traditional markets.

Under the influence of Powell's hawkish comments, the U.S. traditional market also experienced fluctuations. The Nasdaq index dropped by 0.75%, hitting the day's low at the end of the trading day, indicating a cautious attitude towards the uncertainty of the Fed's future policies.

Nevertheless, the recent performance of the cryptocurrency market remains strong. Bitcoin still has a 15% increase over the past week, while assets like ADA, XRP, NEAR, and XLM have seen gains ranging from 20% to 40% in the past week, reflecting the market's resilience and investor confidence.