Bitcoin, the largest cryptocurrency by market cap, fell to an intraday low of $58,528 on Monday, its steepest decline since mid-April, as continued pessimism over the number of rate cuts weighed on sentiment toward cryptocurrencies.
The decline in cryptocurrencies earlier this week came amid doubts about the Federal Reserve’s ability to quickly cut interest rates from a two-decade high.
In the current market environment, Fed officials have recently made crucial statements that could have significant implications for cryptocurrencies.
Federal Reserve Governor Michelle Bowman said Tuesday that it was not yet the right time to start cutting interest rates, dampening hopes for U.S. interest rate cuts. She also said that if inflation does not decline, she will consider raising interest rates.
The remarks reflect a prevailing sentiment at the central bank, with most policymakers saying in recent weeks that while they still expect inflation to return to the Fed’s 2% target, they need more evidence.
The S&P 500 and Nasdaq 100 erased gains after comments from Fed Governor Michelle Bowman.
Here’s how the cryptocurrency market responded
Bitcoin and cryptocurrencies, however, have seen a muted, almost impassive response. Bitcoin bounced above $62,000 on Tuesday, reaching highs of $62,400.
Cryptocurrencies also rose broadly, with a handful of cryptocurrencies in the green at press time. Frog-themed cryptocurrency Pepe traded up 9% and Dogwifhat (WIF) also rose 7.30%. Notcoin (NOT) is up 13% in the same time frame.
Although slightly down, Bitcoin has moved little over the past 24 hours, up 0.97% to settle at $61,595 at the time of writing.
Bitcoin peaked at $73,798 in March, but has lagged behind traditional investments like stocks, bonds, and gold this quarter. The 200-day moving average, which currently stands at around $57,738, is seen as a potential support zone for the price in the event of further declines.
In the coming days, investors and market participants will continue to closely monitor the Fed’s policy decisions and their implications for cryptocurrencies.
