Bitcoin faced a sharp 1.11% drop as traders reacted to the Federal Reserve’s decision to hold interest rates steady. With inflation concerns looming, the cryptocurrency market saw widespread declines. Here’s what you need to know.
Bitcoin Price Reacts to Fed Decision
Bitcoin fell to $116,320.13, marking its second-largest hourly correction in two weeks. The drop came after the Fed maintained rates at 4.25%–4.50%, signaling caution amid economic uncertainty.
Why Did the Fed Hold Rates?
- Inflation remains elevated, with core PCE at 2.5%.
- Fed Chair Powell dismissed speculation about a September rate cut.
- Revised Fed language reflects ongoing economic risks.
Cryptocurrency Market Follows Bitcoin’s Decline
Major altcoins also dropped:
| Cryptocurrency | Price | 24h Change |
|---|---|---|
| Ethereum | $3,712.36 | -1.74% |
| Solana | $173.51 | -1.90% |
| XRP | $3.04 | -2.52% |
| BNB | $775.27 | -1.46% |
What’s Next for Bitcoin?
Analysts warn Bitcoin could test $114,000 if inflation persists or GDP weakens. Traders should monitor:
- Order-flow patterns
- Volatility skew shifts
- Funding-rate dynamics
FAQs
Why did Bitcoin drop after the Fed decision?
Bitcoin fell due to reduced expectations of a rate cut, which dampened investor sentiment.
How does inflation impact Bitcoin?
High inflation often leads to tighter monetary policy, reducing liquidity and risk appetite for assets like Bitcoin.
Will Bitcoin recover soon?
Recovery depends on macroeconomic conditions, Fed policy, and market sentiment.
What should traders watch now?
Key indicators include Fed statements, inflation data, and Bitcoin’s support levels.
