Crypto Market Overview

The crypto market is trending down as investors digest recent comments from major Federal Reserve officials, indicating a cautious stance regarding interest rates.

According to CNBC, Federal Reserve Governor Michelle Bowman stated on Monday that while monetary policy “is now in a good place,” she prefers to see further progress on inflation before any reduction in interest rates.

These remarks align with the views expressed by other Fed officials. Fed Chair Jerome Powell has made it clear that the central bank is not in a hurry to cut interest rates, although investors are eager for guidance on the future course of monetary policy.

Market sentiment stabilized post the release of January’s producer price index last Thursday, along with the consumer price index report on Wednesday, shifting rate-cut expectations to the latter half of 2025.

According to data from CME Group, markets anticipate only one or two quarter-point reductions by the end of 2025. There is nearly a 98% chance that there will be no rate cuts during the Fed’s next meeting in March.

Crypto Markets React

In early Tuesday trading, most cryptocurrencies experienced declines following the Federal Reserve’s cautious outlook on interest rate cuts, which dampened enthusiasm for speculative investments. Historically, higher rates diminish the appeal of riskier assets, while lower rates are viewed as favorable for cryptocurrency. In the last 24 hours, approximately $279 million in liquidations occurred within the cryptocurrency market.

Bitcoin fell by less than 1%, while Ethereum (ETH), XRP, Cardano’s ADA, and BNB Chain’s BNB dropped by around 4%. Solana’s SOL saw an 8% decline, hovering around $169, and meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) each fell roughly 5%.

Investors are keenly awaiting the FOMC meeting minutes later this week, along with the Fed meeting minutes scheduled for release on Wednesday, for any clues regarding the Fed’s desire to maintain steady rates.