How the Fed's Rate Cut Triggered a Crypto Market Sell-Off

The recent rate cut by the Federal Reserve, which lowered interest rates by a quarter point, has significantly impacted the cryptocurrency market, leading to a notable decline in Bitcoin and other major coins. Bitcoin fell to approximately $110,663, reflecting a 3.6% drop, while Ethereum and XRP also experienced substantial losses.

This downturn follows a pattern where investors tend to sell after anticipated news, contributing to increased liquidations within the market. In just one day, over $550 million in crypto positions were liquidated as traders reacted to the Fed's announcement.

Despite some initial optimism about potential liquidity from the rate cut, the Fed’s caution regarding future easing has raised concerns about the viability of cryptocurrencies as safe-haven assets. The mixed reactions among traders indicate uncertainty about whether the easing policy will attract renewed investments or if the cautious tone from the Fed will dampen market enthusiasm.

As fear of dollar debasement grows, interest in Bitcoin remains strong, evidenced by record-high search volumes. However, the overall sentiment in the crypto market remains shaky, with traders bracing for further volatility.