Fed Chair Jerome Powell Delivers Crucial Comments for Market, How Crypto Reacted

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As a seasoned crypto investor with a decade of market experience under my belt, I must admit that the latest Federal Reserve Chair Jerome Powell’s statements about not being in a hurry to cut interest rates has left me somewhat perplexed. In the world of cryptocurrencies, where every tweet or comment by Elon Musk can send prices soaring or plummeting, it seems almost unfathomable that a single statement from Powell could have such a profound impact on the market sentiment.

After Federal Reserve Chairman Jerome Powell stated on Thursday that the central bank has no immediate plans to lower interest rates, the cryptocurrency market experienced a decline.

In his latest speech, Powell indicated that there’s no need for the U.S. Federal Reserve to act quickly in reducing interest rates. The Fed reduced its primary lending rate by 0.25% a week ago, and analysts predict another comparable reduction in December.

According to the Federal Reserve Chair, Powell, there’s no immediate need for a quick reduction in interest rates as the current economic strength indicates a more cautious approach is suitable. He also emphasized that inflation could persist at its current low levels.

— Wu Blockchain (@WuBlockchain) November 15, 2024

According to Powell, the current state of the economy doesn’t suggest an urgent need to reduce interest rates. Instead, he emphasized that the economy’s current robustness allows us to make careful and thoughtful decisions regarding future rate adjustments.

The Federal Reserve’s recent perspectives were shaped following the disclosure of inflation and job market data on Thursday. The producer price index increased by 0.2% in October, aligning with expectations from Dow Jones analysts. The number of initial unemployment claims for the week ending November 9th was 217,000, a decrease of 4,000 compared to the previous week, suggesting that the economy remains robust.

Crypto market price action

Powell’s comments impacted market sentiment, decreasing expectations for a December rate cut.

On Wednesday, Bitcoin hit an unprecedented peak of $93,465, but then its value dropped on Thursday. This decline also affected other cryptocurrencies and led to the closure of numerous long-term investment positions due to the fall in price.

Despite Bitcoin displaying hints of an uptick, its value currently decreased by about 1.84% over the past day to approximately $89,000. However, it’s worth noting that over the course of the last week, it has managed to climb by around 17%.

In the past day, Ethereum, Solana, Dogecoin, and Shiba Inu have dropped by 3% to 7%. On the other hand, Dogewhatever (WIF), Neiro, and Mew experienced more significant declines ranging from 12% to 14%.

Currently, some cryptocurrencies have started recovering with gains, but a significant number of them are still showing losses at the time of reporting. Hedera (HBAR) saw a nearly 13% increase, while Cronos, Stellar, Cardano, Near, and BRETT experienced growth ranging from 3% to 15%.

Similarly impressive, XRP surged by approximately 15% over the past day to reach $0.8122. According to CoinGlass, a massive $504 million in positions have been closed across all cryptocurrencies within the last 24 hours. Interestingly, around $358 million of those liquidations were long positions.

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2024-11-15 15:19