Bitcoin Market Continues Downward Trend Despite Hints of Interest Rate Cuts From Federal Reserve Chair Jerome Powell

The cryptocurrency market, including Bitcoin, continued its downward trend on Monday, even as Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts later this year.

The cryptocurrency market continued its downturn on Monday, even as Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts later this year.

Bitcoin, the world’s largest cryptocurrency, was trading down 3.5% at the time of publication, while the broader crypto market faced a general decline of 4.2%.

However, Powell also cautioned that these rate cuts should not be seen as guarantees for future reductions.

“Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course,” he said, adding that any further cuts would depend on ongoing economic data.

Historically, lower interest rates have been correlated with rising Bitcoin prices, especially evident during the 2017 bull run when rates were between 0.75% and 1.25%.

But despite Powell’s optimistic tone, major cryptocurrencies struggled on Monday. Bitcoin saw a decline of 3.5%, Ethereum dropped by 2.3%, and Solana fell by 2.6%.

Meanwhile, the AI token category, including NEAR, ICP, ASI, RENDER, and GRT, also experienced significant declines.

Among meme coins, popular tokens like DOGE and SHIB fell nearly 10% in value.

Despite the market’s current struggles, some analysts remain hopeful about a potential turnaround.

Vandell, the co-founder of Black Swan Capitalist, commented on Powell’s statement, saying, “Very POSITIVE for risk-on assets like crypto. Rate Cuts = Increase Credit Creation = Increased Global Liquidity = Massive Crypto Bullrun.”

His optimism suggests that Powell’s hints at further rate cuts could eventually attract more investors to the digital asset sector.

As it stands, the cryptocurrency market remains under pressure, navigating a complex landscape amid ongoing macroeconomic uncertainties. The outlook remains cautious, with investors waiting to see how the Fed’s policies will impact market dynamics in the coming months.

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