XRP, Ethereum, and Solana Hit Hard by Fed’s Hawkish Stance

The crypto market continues its downward trajectory this week. Over the past 24 hours, Bitcoin has dropped 7.3% to $94,662, while Ethereum plunged 13% to $3,213. Altcoins have faced even steeper declines: Solana fell 14%, Cardano dropped 18%, and XRP, Ripple’s flagship token, tanked nearly 13%.

This slump follows bearish sentiment earlier in the week, fueled by comments from Federal Reserve Chair Jerome Powell. Powell suggested that interest rate cuts might slow in 2025, triggering a swift decline in Bitcoin’s price.

Lennix Lai, Chief Commercial Officer at OKX, noted that the market’s reaction reflects heightened sensitivity to the Fed’s signals about rate adjustments. He also highlighted the historically low liquidity during the holiday season, which could exacerbate volatility in the short term.

Despite the current pullback, the crypto market remains significantly larger than in 2023, with a total value of $3.5 trillion. Much of this growth was spurred by optimism after Donald Trump’s pro-crypto stance and November election victory. However, Lai cautioned that such optimism is already priced in, and progress toward institutional adoption and regulatory reforms will likely unfold gradually.

BitGalactic’s Take:
While the recent slump may seem concerning, it’s crucial to maintain a long-term perspective. The crypto market’s resilience over time demonstrates its potential for recovery, even amidst macroeconomic challenges. For investors, this is a reminder to stay informed, diversify holdings, and prepare for volatility as the industry navigates regulatory and policy changes.