Fed chair Powell said that the central bank could consider lowering rates at its next meeting in September.
Crypto markets traded lower on Thursday following the Federal Reserve’s decision to leave benchmark interest rates unchanged.
Ethereum (ETH) fell 4% to $3,175, while Bitcoin (BTC) dipped 2% to trade at $64,417. Solana (SOL) plunged 8% today, making it the worst performer in the top 100 cryptocurrencies by market capitalization. Polkadot (DOT) dropped 3%.
The bearish price action came after the Federal Open Market Committee (FOMC) stated it would maintain interest rates at 5.25% to 5.5%. During a press conference, Fed Chair Jerome Powell said that the central bank could consider lowering rates at its next meeting in September, provided economic data continues to show progress in reducing inflation.
“If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September,” said Powell.
The latest FOMC statement struck a more optimistic tone, noting that recent months have seen further progress towards the Fed’s 2% inflation target.
“Powell has a relatively dovish tone on the future, through which a rate cut is on the table for September,” Michael van de Poppe, CEO of MN Trading tweeted. “That’s some good news for Bitcoin and Altcoins.”
QCP Capital observed that Bitcoin has struggled to break above the $70,000 mark for the sixth time, with the trading firm predicting that Bitcoin will likely continue to trade within a certain range.
“ETH longs are preferred as ETHE (Grayscale’s ETH ETF) outflows subside over the next 2 weeks and ETH catches up to BTC,” QCP Capital wrote. “We target a break of $4,000, which is the 2024 high.”
On-chain analytics platform Santiment explained that the FOMC’s decision to keep U.S. interest rates steady led to a drop in crypto prices.
“Traders had some hope that Jerome Powell may opt to cut rates this time, which would have been the first time this happened since March 15, 2020,” Santiment tweeted. “If and when a rate cut finally occurs, this would be a bullish signal for crypto traders and would theoretically lead to a higher potential for both stocks and crypto to thrive for the rest of 2024.”
More than 66,000 traders were liquidated in the last 24 hours, with total liquidations amounting to $225.23 million, according to CoinGlass.
Meanwhile, Ethereum spot exchange-traded funds (ETFs) recorded net outflows on their sixth day of trading, according to data from Farside Investors. On Wednesday, ETH ETFs recorded $77 million in net outflows. BlackRock’s ETHA had its lowest inflows since launch, bringing in $5 million, while Fidelity’s FETH recorded $18.8 million in net inflows.
Stock Markets Rally after Meta Reports Strong Earnings
U.S. stock futures rose in overnight trading on Wednesday as investors assessed the latest corporate earnings report from Meta.
Meta reported better-than-expected second-quarter earnings, with earnings per share (EPS) of $5.16 on revenue of $39.07 billion, beating analysts’ expectations of $4.74 on revenue of $38.3 billion.
S&P 500 futures gained 1.5%, while Nasdaq-100 futures increased by 1%. Futures tied to the Dow Jones Industrial Average added 0.30%. Traders now await Friday’s nonfarm payrolls report.
