Bitcoin Drops Below $58k as Fed Leaves Rates Unchanged

TL;DR

• Bitcoin lost more than 3% of its value on Wednesday and has now dropped below $60k.

• The poor performance comes despite the US Federal Reserve leaving interest rates unchanged.

BTC Suffers as Fed Leaves Interest Rates Unchanged

Bitcoin, the world’s leading cryptocurrency by market cap, begins the new month in a losing manner. BTC has lost more than 3% of its value so far this month and could sustain further losses in the near term.

After losing roughly 15% of its value in April, BTC continued its losing streak into the new month. At press time, BTC is trading at $57,542, down by 3.6% in the last 24 hours. 

The poor performance comes despite the US Federal Reserve leaving interest rates unchanged. Fed Chair Jerome Powell said the apex bank is still leaning towards eventual reductions in borrowing costs. However, he pointed out that recent disappointing inflation readings could delay the expected rate cuts. 

The news didn’t go down well in the crypto space, with BTC and other leading altcoins recording huge losses. Ether is down by 1.5% in the last 24 hours and now trades below $3k per coin.

Analysts at Standard Chartered believe that BTC could continue its downward correction towards the $50k region. The net outflows from spot Bitcoin ETFs in the United States have put a dent on BTC’s performance in recent days.

Analyst Geoff Kendrick wrote that,

“This means that more than half of the spot ETF positions are under water and so the risk of liquidation of some of them must be considered as well.”

 With Bitcoin and major altcoins underperforming, the total cryptocurrency market cap has dropped to $2.15 trillion, down by 2.7% in the last 24 hours. If the bearish trend continues, the total crypto market cap could drop below the $2 trillion mark for the first time this year.