Bitcoin (BTC) has experienced a significant drop below the $25,000 mark for the first time in three months, marking a challenging period for the cryptocurrency industry. The decline occurred following an announcement from the United States Federal Reserve and amid ongoing legal actions against major crypto exchanges Coinbase and Binance.
Within a mere 30-minute timeframe on June 15, Bitcoin’s price plummeted by 4%, sliding from $25,867 to $24,819, according to TradingView data. However, as of now, Bitcoin has managed to regain some ground and is hovering just above the $25,000 mark.
In the previous week, Bitcoin had maintained stability around the $26,000 level as the market grappled with the Securities and Exchange Commission (SEC) regulatory actions against leading exchanges and increasing macroeconomic uncertainty linked to interest rate signals from the Federal Reserve.
The sudden price drop came shortly after the Federal Reserve’s announcement of a pause on interest rate hikes, ending a fifteen-month-long campaign aimed at combating rising inflation. While the market had widely anticipated this pause, the Federal Open Markets Committee statement hinted at potential future rate hikes, which typically dampens investor enthusiasm for riskier assets such as cryptocurrencies.
eToro Market Analyst Josh Gilbert emphasized that Federal Reserve Chair Jerome Powell has clearly indicated that this pause is only temporary, potentially indicating further challenges ahead for Bitcoin in the long run.
Gilbert stated, “Much of the optimism we have witnessed in risk assets, including Bitcoin, is founded on the expectation that inflation will decline and interest rates will reach their peak, and then begin to decline.”
Ether (ETH), the second-largest cryptocurrency by market capitalization, also experienced a decline, falling over 5% from $1,727 to $1,631 during the same timeframe. Additionally, altcoins labeled as securities in the SEC’s lawsuits were not spared from the bearish sentiment, as many of them suffered losses of over 3%.
Cardano (ADA) saw a decrease of 3.4% in the past 24 hours, while Polygon (MATIC) and Solana (SOL) experienced declines of 3.3% and 2.8% respectively. The broader crypto market is closely monitoring these developments and their potential impact on future price movements.