- Bitcoin and XRP fall amid concerns over the Federal Reserve’s potential interest rate hikes.
- The crypto market faces a decline in investor sentiment and speculative momentum.
- Regulatory scrutiny, including a subpoena from the CFTC, adds to the market’s unease.
The recent downturn in Bitcoin and XRP prices is fueled by heightened concerns over interest rates and macroeconomic factors. A stronger-than-expected U.S. jobs report has raised the likelihood that the Federal Reserve will maintain higher rates for longer, which typically depresses riskier assets like cryptocurrencies.
Alongside economic worries, investor sentiment in the crypto market has softened, with Bitcoin futures showing downward speculative momentum. Glassnode observed that long-term Bitcoin holders are slowing down their selling, yet new investors are controlling an increasing portion of Bitcoin’s supply.
Bitcoin and XRP Fall as Market Concerns Grow Over Economic Outlook and Regulatio
Bitcoin and XRP experienced a notable drop in prices following concerns about the Federal Reserve’s monetary policy. The stronger-than-expected U.S. jobs report on Friday fueled fears that the central bank may not ease interest rates as quickly as previously anticipated. This uncertainty put pressure on the cryptocurrency market, leading to Bitcoin trading below $93K and XRP losing 3.2% of its value.
Alongside macroeconomic concerns, technical analysis of Bitcoin reveals that it is testing a crucial pullback level. Historically, a bounce at this point has followed, but the market’s current risk aversion could hinder a recovery. If bearish trends continue, Bitcoin might face a further decline to around $88K, and in the worst-case scenario, to $74K.
Investor activity in Bitcoin ETFs paints a mixed picture. Despite inflows into Bitcoin ETFs showing a slight increase, the overall crypto market sentiment remains weak. Glassnode’s analysis of Bitcoin futures indicates that traders are reducing their exposure to the cryptocurrency, further reflecting a more cautious outlook among investors.
The regulatory environment is also contributing to the market’s struggles. Coinbase recently received a subpoena from the Commodity Futures Trading Commission (CFTC) as part of an investigation into the Polymarket betting platform. These regulatory pressures add another layer of uncertainty, particularly as market participants face rising scrutiny from authorities.
The combination of economic uncertainty, regulatory challenges, and weakened investor sentiment is contributing to the ongoing struggles in the cryptocurrency market, leaving its near-term trajectory uncertain.
“The cutting cycle is over,” BofA analysts wrote, reflecting concerns over the Federal Reserve’s monetary policy.
The market’s reaction
