The decline in crypto prices coincided with a drop Thursday in global equity markets as investors digested hawkish U.S. Fed remarks on monetary policy
Bitcoin declined Friday to trade below the $27,000 support level. Ether also pulled back and shed control of the $1,600 mark for the first time in the past week. All other top non-stablecoin crypto currencies logged losses during the last 24 hours. Solana led the losers with a drop of more than 3%. The decline in crypto prices coincided with a drop Thursday in global equity markets as investors digested hawkish U.S. Fed remarks on monetary policy. U.S. stock futures were trading flat during opening hours in Asia after all three top U.S. indexes logged losses of more than 1.0% Thursday.
Bitcoin dropped 2.10% during the past 24 hours to $26,580.90, according to CoinMarketCap data. The world’s biggest token dropped to $26,389.30 on Thursday night, its lowest level in a week.
After deciding to keep interest rates unchanged in September as expected, the U.S. Fed projected one more interest rate hike by the end of this year. While it lowered its forecast for the pace of interest rate cuts in 2024, comments from Fed members were “more hawkish” than experts anticipated.
The decline in most crypto currencies this morning could reflect the cautious stance of investors, who are cautiously digesting the impact of the Fed’s recent interest rate comments, said John Stefanidis, Chief Executive Officer of blockchain infrastructure platform Balthazar DAO.
Moreover, the jump in 10-year U.S. Treasury yields to 16-year highs could have played a role in reshaping market dynamics, he said.
In spite of macro pressures, Bitcoin can receive some support from the multiple spot Bitcoin ETF applications ongoing in the U.S., said Markus Thielen, head of research and strategy at digital asset service platform Matrixport.
If the Securities and Exchange Commission approves a Bitcoin exchange-traded fund, which we believe is a 70% probability over the next six months, then there could be an immediate re-pricing and Bitcoin could be +20% more expensive in an instant. Therefore, it is necessary to keep upside exposure to such an event, he stated.
Ether dropped 2.35% to $1,585.53 and was trading 2.66% lower for the week. The world’s second biggest token dropped below the $1,600 support level for the first time since last Thursday.
All other leading non-stablecoin crypto currencies posted losses during the last 24 hours. Solana’s SOL led the decliners, dropping 3.73% to $19.54. But it still posted a weekly gain of 3.35%.