- On Sunday, the crypto market experienced a significant selloff following an assassination attempt on Donald Trump.
- This event has contributed to a drop in Bitcoin prices to $58K due to upcoming FOMC meetings and technical chart patterns.
- Ethereum’s decline influenced the performance of other altcoins, leading to a broad loss of momentum in the crypto space.
Crypto market turmoil: Investors brace for Fed decisions amid market turbulence.
Market Carnage Amidst Trump Assassination Attempt
The cryptocurrency market faced a steep decline, with its total market capitalization decreasing from $2.1 trillion to $2.03 trillion within a day, resulting in an $80 billion loss. This drop came after another assassination attempt on Donald Trump in Florida. The Bitcoin and Ethereum sell-off was particularly notable, significantly impacting the entire market.
Weak Sentiment and Market Reactions
The fear & greed index, which gauges the sentiment of the crypto market, dropped substantially from a neutral position of 51 to a fear level of 39 in just 24 hours. Major altcoins such as Solana (SOL), XRP, Cardano (ADA), and Dogecoin (DOGE) also saw declines, following Bitcoin and Ethereum’s lead. However, market participants are looking ahead to the Federal Open Market Committee (FOMC) meeting and remarks from Federal Reserve Chair Jerome Powell for potential market direction.
Factors Behind Bitcoin’s Decline
Bitcoin’s recent price drop can be attributed to traders’ cautious stance ahead of expected actions from the Federal Reserve. The market is speculating about possible interest rate cuts by the Fed for the first time since 2020. The CME FedWatch tool shows a 61% probability of a 50 basis points rate cut and a 39% chance of a 25 basis points cut post the meeting. Overall, the market anticipates a total reduction of 125 basis points this year.
Insights from Market Analysts
PlanB, the creator of the Bitcoin stock-to-flow (S2F) model, noted on social media that Bitcoin miners are facing profitability challenges post-halving, leading many to liquidate holdings. He suggested that Bitcoin needs to double its current price to initiate a bullish trend, consistent with historical data where post-halving surges have bolstered miner profits. Crypto analyst Credible Crypto highlighted that Bitcoin’s recent drop from the $61-62K resistance zone was anticipated. However, maintaining a price above $58,500 is critical to avoid further declines.
Ethereum Price Falls Below $2,300
Ethereum’s price drop below $2,300 was influenced by activities of dormant whale accounts that became active after years, selling their ETH holdings. Additionally, similar sentiment was observed as the Ethereum Foundation and Vitalik Buterin sold portions of their Ethereum.
Key Support Levels and Market Analysis
Analyst Ali Martinez pointed out that Ethereum could face further declines if it does not sustain key support levels between $2,290 and $2,360, where approximately 52 million ETH are held by about 1.90 million addresses. A breach of this support range may lead to significant sell-offs driving prices toward $1,800. Currently, Ethereum is down 6% over the past 24 hours, trading at $2,308.
Conclusion
The crypto market’s recent selloff has underscored the impact of both significant external events and key market indicators. With Bitcoin and Ethereum influencing the broader altcoin market, the upcoming FOMC meeting and statements from the Federal Reserve are eagerly anticipated. Investors are cautiously monitoring the situation, with the potential for rate cuts being a critical factor for market sentiment in the near term.
