Bitcoin, Ethereum Plunge After Fed Chair Jerome Powell Discloses the Central Bank Can't Hold BTC and Isn't Looking for a Law Change

Leading cryptocurrencies tanked Wednesday after the Federal Reserve's hawkish outlook and the central bank's statement that it has no interest in owning Bitcoin.

Major cryptocurrencies plunged on Wednesday following the Federal Reserve's hawkish outlook and statement that it has no interest in owning Bitcoin.

Bitcoin fell sharply throughout the day, but it managed to stay above the psychologically crucial $100,000 mark.

Ethereum's decline was steeper, with the second-largest cryptocurrency dropping to the $3,600 region after a nearly 6% decrease.

The slump triggered over $675 million in cryptocurrency liquidations in the last 24 hours, with long liquidations hitting $578 million.

The decline came after Fed Chair Jerome Powell's comments during the press conference following the Federal Open Market Committee meeting, where he said that the central bank isn't able to hold Bitcoin and isn't seeking a law change.

Bitcoin's Open Interest dropped by 1.1%, but the number of traders taking long positions for the coin surged above 50%, indicating expectations of a revival.

Over $1 billion in short positions faced liquidation if Bitcoin recovers to $105,900.

According to the Cryptocurrency Fear & Greed Index, market sentiment cooled from "Extreme Greed" to "Greed," indicating a decrease in FOMO.

Top Gainers (24-Hours)

Coin Price 24-Hour Change

1. D2T $0.154 12.2%

2. FGHT $0.04 7.4%

3. TAROT $0.092 6.7%

4. GMT $2.19 6.3%

5. IMX $1.03 6.1%The global cryptocurrency market capitalization stood at $3.51 trillion, dropping over 5% in the last 24 hours.

Stocks got pounded on Wednesday. The Dow Jones Industrial Average plunged 1,123.03 points, or 2.58%, to close at 42,326.87 as the index posted its 10th consecutive losing day. The S&P 500 slipped 2.95%, ending at 5,872.16, while the tech-focused Nasdaq Composite dipped 3.56% to 19,392.69.

The market suffered despite the Fed's latest 25-basis-point reduction as Chair Powell hinted at a more cautious stance in 2025, with just two more 0.25% rate cuts projected next year, compared to the four anticipated in September.

The benchmark 10-year Treasury yields leaped to 4.5%, the highest since early June, as risk sentiment evaporated.

Analyst Notes: Widely followed cryptocurrency analyst and trader Ali Martinez weighed in on the central bank's policy shift, stating that 2025 looks a "lot less rosy."

“For now, keep calm, don't panic sell, and remember: markets hate uncertainty, but they also thrive on it when the dust settles. Let's see where this goes from here,” Martinez advised traders.

In his analysis of the Federal Reserve action, Ali said, “It wasn't today's 25 bps cut that made markets freak out—it was the realization that inflation might stick around longer, and the Fed's not quite ready to take its foot off the gas. Sentiment is shifting, and 2025 suddenly looks a lot less rosy.

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What's the deal with today's market chaos?

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The Fed went ahead with a predictable 25 bps rate cut. No surprises there—97% of people expected it. But then, Bitcoin tanked around $100,000.

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Why? Let me explain without the usual Fed jargon.

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