Bitcoin prices sold off and the broader cryptocurrency market corrected as the Federal Reserve issued a hawkish outlook for inflation in 2025.
Bitcoin and the broader cryptocurrency market saw a sell-off as the Federal Reserve announced a 25 basis point cut in its benchmark interest rate and said the cuts in 2025 would be smaller than initially planned.
Bitcoin follows Fed Chair Jerome Powell’s rate cut
BTC prices fell $96,396, or 4.6%, to $101,300, while ETH prices fell $3,397.99, or 5.96%, to $3,600.
Powell raised eyebrows when he said there would be only two more rate cuts in 2025, even though market participants were expecting a rate cut of 0.25%, in line with most traders and inflation expectations. In addition to the hawkish view by some traders, the Fed also raised its 2025 inflation forecast to 2.5% from 2.1%. The slight change in outlook is largely due to the expected policy changes under the incoming Trump administration, which is expected to impose tariffs on imports, potentially lay off millions of undocumented workers, and introduce measures that could widen the deficit. Economic policy.
Powell emphasized during the conference call that the Fed’s policy changes are a sign that the central bank is ready to adjust its policy to the needs of the US economy.
Regarding short-term price predictions for Bitcoin, cryptocurrency analyst Skew said that BTC’s decline has eliminated “positions on both sides” as long positions are closed and “short positions are profitable.”
Bitcoin price fell into a major supply zone in the $100,000 to $98,000 range, and analysts said it was important to retake the $100,000 to $101,400 range by providing a break before the daily candle closes.
