Crypto currencies drop after Powell’s comments

Bitcoin, Ether drop, Toncoin leads the losers with a drop of more than 6%

The U.S. Federal Reserve kept interest rates unchanged as expected at its September meeting on Wednesday. Bitcoin briefly dropped below $26,900 in the early hours of the morning after Fed Chair Jerome Powell said more interest rate hikes may be required to lower inflation. But the token is now trading above the $27,000 support level. Ether also declined but held above $1,600. Most other leading crypto currencies logged losses during the last 24 hours. Toncoin led the losers with a decline of more than 6%.

Bitcoin slipped 0.28% during the past 24 hours to $27,137.70. But bitcoin still posted a weekly gain of 3.52%, according to CoinMarketCap data.

The Fed announced a much-expected halt in its rate hiking cycle Wednesday. The rate will continue at 5.25% and 5.50%, its highest level in 22 years. The Fed increased its estimated interest rates for the end of this year to 5.6%, signalling another rate hike to come within the year. The Fed also raised its projection for the end of 2024 to 5.1%, up from the 4.3% forecasted in June.

With 99% of predictions expecting no change at the Federal Open Market Committee meeting, it was clear that we would see a stabilization of interest rate policy moving forward. Nevertheless, it came as a surprise that the report stressed slower rate cuts moving forward than projected earlier, stated Michael Silberberg, Head of Investor Relations at crypto hedge fund AltTab Capital.

While it is a relief that the Fed see us at the peak of rate hikes with their prediction of fewer rate cuts next year, it is hard for us to take today’s announcement with too much hope, he said.

After Powell’s announcement, Bitcoin dropped more than 1.5% to $26,864.08 on early Thursday morning. But it soon recuperated to above $27,000.

Ether declined 1.26% to $1,622.84 but was still trading 0.97% higher for the week. Most other top crypto currencies logged losses during the last 24 hours. The exceptions were XRP and Solana’s SOL, which added 1.52% and 1.33% respectively.

Toncoin, the native token of The Open Network (TON), led the decliners. The coin shed 6.54% to $2.41, while holding a weekly gain of 27.20%. The token has surged around 75% during the last 30 days.

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