Bitcoin experienced a significant drop of about 3% following the announcement of the FED’s decision to maintain interest rates. While the certainty of the FED’s decision was widely expected, the unexpected factor was the dot plot released by the institution and the hawkish tone of FED President Jerome Powell’s remarks.
The previous dot plot had forecasted three interest rate cuts in 2024, but the updated version only predicted one 25 basis point cut. Powell highlighted the ongoing high inflation rates and did not offer any dovish comments on future rate cuts, leading to the decline in Bitcoin prices.
The price of Bitcoin, which was hovering around $69,800 before the interest rate decision, dropped to approximately $67,500 at the time of writing. This decline led to a total of $147 million being liquidated from the cryptocurrency market in the past 12 hours, with the majority coming from long positions totaling $83 million.
Bitcoin was the most affected cryptocurrency in terms of liquidations, followed closely by Ethereum. This sudden drop in price and liquidations serves as a reminder of the volatile nature of the cryptocurrency market.