The crypto market is experiencing a widespread correction following the latest inflation data from the U.S., which diminishes the likelihood of a rate cut by the Federal Reserve.
The price of #bitcoin has seen a drop of over 3% in the last 24 hours, breaking the psychological support of $80,000 to trade in the range of $77,950. This pullback marks the end of a bullish run that had pushed the leading cryptocurrency to nearly $82,400 last weekend.
The main driver behind this massive liquidation is the resurgence of macroeconomic fears. Recent Producer Price Index (PPI) data in the U.S. came in higher than expected, reflecting persistent inflation. This scenario has set off alarm bells among investors regarding the possibility that the Federal Reserve (Fed) will keep interest rates elevated for longer or even implement new hikes to curb the cost of living.
An environment of rising interest rates boosts the yield of traditional safe-haven assets and increases the opportunity cost of holding positions in risk assets, directly hitting the crypto sector.
Impact on Altcoins
Nervousness hasn't been limited to Bitcoin; major coins in the market are also trading down on a day of widespread red numbers:
Ethereum (ETH): Dropped 3.5%, stabilizing around $2,220.
Solana (SOL) and Cardano (ADA): Led the losses in the Top 10, with pullbacks ranging between 4% and 5.5%.
BNB: It took a hit with a correction close to 4.5%, dragged down by weekend bearish sentiment.
Adding to the pressure from the Fed's monetary policy are latent geopolitical factors and uncertainty in traditional markets, prompting traders to adopt a cautious stance and take profits while awaiting clearer signals from central banks.
