The pause in the U.S. Fed’s interest rate hikes did not stop Bitcoin from plunging to its lowest level in months. Many other cryptocurrencies also suffered heavy losses, with ETH, XRP, ADA, DOT, LTC, AVAX, and more dropping by 5-7%.
The Fed raised its benchmark interest rate by 0.5 percentage points to its highest level in 15 years and indicated there would be further hikes next year.
Bitcoin Plunges to a New Low in 2023
The past week was a roller-coaster ride for BTC, as it faced ups and downs amid regulatory pressures and market sentiments. After recovering from a dip to below $26,000 on Tuesday due to the SEC’s lawsuits against Binance and Coinbase, BTC struggled to maintain its momentum and dropped again to under $26,000 by Friday.
The weekend brought some relief as BTC hovered around $26,000. The new week started with a similar trend, with the cryptocurrency trading at that level.
However, the US FOMC meeting on Wednesday changed the game. Fed Chair Jerome Powell announced that he would not raise the key interest rates anytime soon, as expected by many. But instead of boosting BTC’s price, this decision triggered a sell-off that pushed BTC to under $25,000 for the first time since mid-March. Although BTC attempted to bounce back, it still trades below that level.
Its market capitalization has fallen to $485 billion, while its dominance over the alts remains steady at 47.5%.
Alts Also Went on a Deep Dive
As Bitcoin plunged, the alternative coins followed suit. Ethereum was one of the worst-hit among the larger-cap alts, losing more than 6% of its value. Consequently, ETH reached a new multi-month low below $1,650.
Other major altcoins like Ripple, Cardano, Litecoin, Polkadot, Polygon, and Avalanche also experienced similar losses. Binance Coin, Dogecoin, Tron, Solana, and Shiba Inu fared slightly better but still ended in the red.
The situation was not much different for the mid-and lower-cap alts. Lido DAO, Arbitrum HBAR, XLM, and TONCOIN were among the most significant losers of the day. As a result of this market-wide sell-off, the total crypto market cap shed $40 billion and is dangerously close to falling under the $1 trillion level.