2024

Jerome Powell

Felix

Reserve

<p>Just recently Federal Reserve Chairman Jerome Powell announced his cautious projection on how the Federal Reserve’s monetary policies will pan out. </p> 
<p>This includes how he envisions Federal Open Market Committee (FOMC) interest rate adjustments will play out. </p> 
<p>Powell revealed that the rate cuts expected for 2025 could first shrink in half compared to market participants’ previous expectations. </p> 
<p>This revelation has shaken investors and within the cryptocurrency as well as the equity markets into a spiral of anxiety and a major sell-off, especially among altcoins.</p> 
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter">
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   <p lang="en" dir="ltr"><img src="https://s.w.org/images/core/emoji/15.0.3/72x72/1f4c9.png" alt="📉" class="wp-smiley" style="height: 1em; max-height: 1em;"> After the FOMC interest rate cuts, both crypto and equities traders were left feeling a bit concerned. Not because of the current cuts, but due to Jerome Powell's projection for 2025 to have half the amount of rate cuts as expected.<br><br>Altcoins, in particular, have gotten… <a href="https://t.co/LVR2oIvCRu">pic.twitter.com/LVR2oIvCRu</a></p>— Santiment (@santimentfeed) <a href="https://twitter.com/santimentfeed/status/1869593853939855427?ref_src=twsrc%5Etfw">December 19, 2024</a>
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<h2 class="wp-block-heading" id="h-dramatic-pullbacks-in-altcoin-valuations"><strong>Dramatic Pullbacks in Altcoin Valuations</strong></h2> 
<p>Specific altcoins began to suffer from dramatic drops in their market valuations following Powell’s forecasts. </p> 
<p>These were Avalanche, Chainlink, and Litecoin, which all together fell by 16%. Altcoin known as Pepe, however, went down by 17% in just one day. </p> 
<p>The nature of the cryptocurrency market makes these significant losses. Especially in response to economic pronouncements from influential people like Powell, a volatile one.</p> 
<p>This sell-off is part of broader market fears of a future less accommodative monetary policy. This may limit liquidity and higher borrowing costs, less favorable conditions for high-risk investments. </p> 
<p>At the most extreme, this market reaction might be a psychological response to unexpected changes in monetary policy as expected, which has historically been a powerful force shaping speculative assets.</p> 
<h2 class="wp-block-heading" id="h-altcoin-market-overview"><strong>Altcoin Market Overview</strong></h2> 
<p>Founding of Hartmann Capital is what Venture Capitalist Felix Hartmann had to say about the altcoin segment, saying it wouldn’t be until January 2025 when the ‘slow bleed’ ends. </p> 
<p>Hartmann says some altcoins can see spikes lasting days or weeks. However, he says that most are set to either slide further downhill over the next couple to six weeks or consolidate before breaking out. </p> 
<p>Recent market activities where around $481.6 million altcoin long positions were liquidated in that span back up this view.</p> 
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   <p lang="en" dir="ltr">Funding rates back to normal.<br><br>Closed shorts on overheated but popular alts (e.g., XRP &amp; SUI) while holding dino alt shorts that, in most cases, likely won't revisit last week's highs against BTC.<br><br>Added more long exposure, primarily in BTC, with smaller positions in ETH and SOL.… <a href="https://t.co/GOjgLknQR3">https://t.co/GOjgLknQR3</a></p>— Felix Hartmann (@FelixOHartmann) <a href="https://twitter.com/FelixOHartmann/status/1866582998943957430?ref_src=twsrc%5Etfw">December 10, 2024</a>
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<p>This trend is simply in the broader cryptocurrency market. As per the data, Bitcoin has also been changing hands under very crucial psychological levels. </p> 
<p>Although Bitcoin briefly surpassed the $100,000 mark earlier this month, the market is filled with the same volatility and sensitivity to regulatory and economic developments as the rest of the world.</p> 
<h2 class="wp-block-heading" id="h-future-prospects-and-trading-strategies"><strong>Future Prospects and Trading Strategies</strong></h2> 
<p>While things are definitely on the downside right now, Hartmann is keen to talk about how “maybe it’s an okay time to bring long bias back.” </p> 
<p>This suggests there might be a turning point for some traders willing to accept a higher amount of risk. </p> 
<p>Short squeezes expected could send <a href="https://www.thecoinrepublic.com/price-prediction/bitcoin/">Bitcoin</a> back up to the $99,000 level. And in the process put at risk $1.53 billion worth of short positions for liquidation. </p> 
<p>Such a move could potentially have major ramifications for the market. If realized amid the current fear and uncertainty could even help lead the market in a rapid recovery.</p> 
<p>Now, however, Bitcoin’s performance is being very closely watched by traders. This is often the case with Bitcoin serving as a bellwether for the wider cryptocurrency space. </p> 
<p>Catalyzing recoveries in other altcoins, particularly the ones that got hit the hardest in the sale will be a rebound in Bitcoin. </p> 
<p>As noted by co-founder of CryptoSea Daan de Rover there is also a large build-up of liquidity to the upside for Bitcoin, suggesting the space to move quite substantially if key resistance levels break.</p> 
<p>The post <a href="https://www.thecoinrepublic.com/2024/12/19/altcoin-in-shambles-amid-fomcs-rate-cuts/">Altcoin Market In Shambles Amid FOMC’s Rate Cuts</a> appeared first on <a href="https://www.thecoinrepublic.com">The Coin Republic</a>.</p>

Altcoin Market In Shambles Amid FOMC’s Rate Cuts

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