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Bitcoin, Ether Plunge 5% Ahead of Widely-Anticipated Fed Rate Cuts

Sep 15, 2024
  • Bitcoin started the week with a 3% decline, falling below $58,400. The drop came ahead of expectations of the U.S. Federal Reserve potentially cutting rates, influencing market sentiment.
  • U.S.-listed Bitcoin ETFs saw significant inflows on Friday at over $263 million in the highest since July 22.
  • Ether ETFs also saw inflows, though much smaller at $1.5 million, indicating continued investor interest in crypto assets.
As a seasoned researcher with years of experience navigating the volatile crypto market, I find myself both intrigued and cautious by this week’s developments. The initial 3% decline in Bitcoin, followed by significant inflows into U.S.-listed Bitcoin ETFs, paints a complex picture that suggests investors are both bullish and bearish at the same time.To start the trading week, Bitcoin (BTC) experienced a 3% decrease, trading slightly under $58,400. The CoinDesk 20, an indicator that tracks the largest digital currencies, also dipped by 5%.

On the weekend, Bitcoin frequently surpassed $60,000 due to positive U.S. data causing a surge on Friday. American-listed Bitcoin exchange-traded funds (ETFs) experienced approximately $263 million in net inflows – the highest since July 22. Meanwhile, Ether ETFs saw inflows for the second consecutive day since August 28, amounting to around $1.5 million.

Yet, cryptocurrency markets experienced a downturn on Monday, with trading platforms in Asia initiating operations before a significant week approaches. During this period, global investors anticipate that the Federal Reserve will implement its initial interest rate reductions in more than four years.

On Polymarket, traders predict that there’s approximately a 51% likelihood for a 0.5 percentage point reduction in interest rates, and a 48% probability for a 0.25 percentage point adjustment. Meanwhile, the odds of no change in interest rates are quite low, standing at around 2%.

Historically, a shift towards reduced lending rates has tended to boost optimism among traders, as this makes capital more affordable and stimulates expansion in higher-risk markets.

The price of Ether (ETH) decreased by about 5.5% in the last 24 hours, according to CoinGecko’s data, which represents its biggest one-day drop since early August. Meanwhile, Cardano’s ADA and Solana’s SOL experienced a decline of 5% and 4%, respectively. In contrast, BNB Chain’s BNB was the least affected, with a minimal decrease of only 1.1%.

In simple terms, Nervos’ CKB experienced a significant surge of around 10.5% over the past day, largely due to ongoing optimism following its listing on Upbit, a Korean exchange known for its popularity with meme-coin traders.

Traders who wagered on rising futures prices suffered a loss of approximately $143 million when prices suddenly fell, according to data from CoinGlass.

In other parts, the closely monitored Bitcoin (BTC) to Ethereum (ETH) rate, which indicates the fluctuations between these two main cryptocurrencies, dropped to levels not seen in almost four years.
In the past year, Ethereum as a protocol has faced significant competition. Solana is becoming a popular platform for launching meme coins, while newer chains such as Basis and Telegram’s TON are gaining more attention, potentially influencing the demand for Ether.

In simpler terms, Sony’s Soneium could potentially challenge existing players as its development progresses. Today, Sony and Circle declared that USDC (a stablecoin) will be available on their platform, but the exact amount to be issued wasn’t specified in the announcement.

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2024-09-16 09:42