Bitcoin dipped below $25,000 for the first time since March as a result of the Federal Reserve’s June meeting, with cryptocurrency values dropping.
According to Coin Metrics, on Thursday, bitcoin was down almost 4% at $24,866.92 while ether was down more than 5% at $1,632.47. Altcoins also fell. Tokens for Cardano dropped 6%, Polygon lost 8%, and Solana lost 4%.
Additionally, Tether (USDT), which lost its peg to the US dollar on most exchanges and dropped to 99 cents in its worst decline since November, felt the weight of selling pressure.
After the Federal Reserve ended its June meeting and opted to hold interest rates steady for the time being, but stated that two more increases were anticipated later this year, the decline started late on Wednesday. While stocks suffered as the news spread, the price of cryptocurrencies stayed unchanged until after the close.
According to Michael Safai, managing partner at Dexterity Capital, “this has less to do with the FOMC and more to do with thinner liquidity and weak sentiment.” Given the current low trading volume, a big (but not gigantic) sell order is sufficient to trigger liquidations.
There won’t be much fresh capital coming in to support prices as readily since traders are more likely to keep their money off the table amid this regulatory reaction, especially when it comes to altcoins, he continued.
After the Securities and Exchange Commission sued Coinbase and Binance and questioned the regulatory status of some well-known coins they labeled “crypto asset securities,” the market was further hampered this week by lackluster price movement and unfavorable sentiment. That was only the most recent twist in a regulatory crackdown that has been weighing on the sector since the year’s beginning.