Bitcoin prices declined further on Thursday, continuing a recent downward trend despite a rally on Wall Street following indications from the Federal Reserve of a potential interest rate cut in September.
The crypto market’s sentiment was mostly subdued due to concerns over a potential large-scale Bitcoin sale by the U.S. government, which reportedly mobilized about $2 billion worth of Bitcoin earlier this week.
Positive momentum from crypto-friendly pledges by Republican presidential nominee Donald Trump also dissipated. A Bloomberg poll showed that Democratic frontrunner Kamala Harris erased Trump’s lead in seven crucial battleground states.
Bitcoin’s value dropped 2.9% in the past 24 hours, reaching $64,256.2 by 02:01 ET, and earlier in the day, it had fallen as low as $63,599.5.
Fed Discusses Rate Cuts, But Bitcoin Remains Unaffected
The Federal Reserve held interest rates steady on Wednesday, as anticipated, with Chair Jerome Powell indicating progress towards reducing inflation and a cooling labor market. Powell also mentioned the potential for a rate cut in September if upcoming data is favorable, which sparked a sharp rally on Wall Street.
Despite optimism regarding the Fed and strong earnings from the tech sector, traders remained focused on equities, even though the prospect of lower U.S. interest rates could be positive for cryptocurrencies. Crypto markets generally benefit from low-rate environments due to increased liquidity enhancing their speculative appeal.
However, risk appetite outside the U.S. was less robust. Japanese markets declined after the Bank of Japan increased interest rates and signaled potential future hikes due to the growing strength of the Japanese economy. The yen surged following the BOJ’s move, bringing Bitcoin to nearly a three-week low against the currency.
Geopolitical tensions in the Middle East, following the assassination of a Hamas leader in Iran, also contributed to cautious market sentiment.
Crypto Price Update: XRP Rally Stalls, Altcoins Decline
The broader crypto market mirrored Bitcoin’s decline, with XRP dropping 5.7%, reversing gains from a recent surge. The token had climbed on unfounded rumors that Ripple, the issuer of XRP, was nearing a settlement with the Securities and Exchange Commission in a long-standing lawsuit.
Ether, the world’s second-largest cryptocurrency, fell 3.7% to $3,179.26, while SOL and ADA declined by 6.9% and 5.1%, respectively.
Among meme tokens, DOGE decreased by 3.9%.
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