BTC price dropped 3% and Ethereum fell 6% in the last 24 hours, just before important decisions on interest rates from the Federal Reserve (Fed), Bank of England (BoE), and Bank of Japan (BoJ). The total value of all cryptocurrencies together went down by 4.5%, now standing at $2.12 trillion.
BTC’s price dropped sharply toward the end of the week, reaching a low of $58,200 before rising a little to above $58,600, according to CoinGecko. People have different opinions about what will happen next, with some expecting the price to rise and others thinking it might fall more.
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Impact of BTC Price on The Market
Since BTC’s Price fell, other cryptocurrencies followed. Ethereum’s value dropped 6%, now around $2,300, while Solana (SOL), Dogecoin (DOGE), and Ripple (XRP) each lost about 5%. The biggest drops in the top 100 cryptocurrencies came from Injective (INJ), Internet Computer (ICP), Pepe (PEPE), and Ondo (ONDO), all falling by about 7%.
The crypto market is waiting for more changes as the Fed’s decision on interest rates is close. Some experts think if the Fed lowers rates by 25 basis points, there could be quick selling, as many people already expect this. But there is also talk of a larger 50-basis-point cut. The CME FedWatch tool shows a 41% chance of the smaller cut and a 59% chance of the larger one. Just last week, the chance of the bigger cut was only 30%.
Many are hoping for the larger cut. Some experts are unsure about what it will mean. Steve Hanke, an economist at Johns Hopkins University, thinks a 50-basis-point cut could help the crypto market because it hasn’t been fully expected yet. He said if the bigger cut happens, it might give the market a lift.
However, others believe a bigger cut could mean the economy is in trouble, which could stop the market from reacting well. Leena ElDeeb, a researcher at 21Shares, warned that a recession could cause people to sell riskier assets like cryptocurrencies in the short term.
The Fed’s decision is expected on Wednesday, September 18. If they cut rates, it would stop the increases that began in 2022 and be the first cut since 2020.
The Bank of England is also expected to make its decision on September 19. This comes after the bank lowered its rate from 5.25% to 5% on August 1, the first cut since it began raising rates in 2021. Officials at the Bank of England are watching inflation closely, even though it seems to be easing.
The Bank of Japan will also decide on interest rates on September 19. This meeting is being closely watched because the BoJ has kept rates very low for years, including negative interest rates and methods to control longer-term rates. Analysts are waiting to see if the BoJ will change its approach based on what’s happening in other countries.
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