Market Turbulence: Powell’s Comments Shake Crypto and Stock Markets as Rate Cut Hopes Dim
In a dramatic shift for both traditional and crypto markets, Federal Reserve Chair Jerome Powell’s hawkish remarks sent assets tumbling across the board on Thursday, November 14, 2024, as hopes for quick interest rate cuts faded.
Crypto markets feel the heat
Bitcoin pulled back sharply from its recent highs, dropping below the $89,000 mark after touching $91,000 earlier in the day. The flagship cryptocurrency saw a 2.23% decline, settling at $88,282.07 by evening trading. The sell-off was not exclusive to Bitcoin.
- Ethereum took a harder hit, falling 3.55% to $3,091.21.
- Dogecoin suffered an even steeper decline of 4.46%, trading at $0.3726.
The crypto market saw massive liquidations, with over $505 million worth of positions wiped out in 24 hours. Long positions suffered the most, clearing out nearly $350 million in upside bets.
Traditional Markets Mirror Crypto’s Decline
Wall Street wasn’t spared either. The major indices closed in the red:
- Dow Jones fell 207.33 points (-0.47%) to 43,750.86.
- S&P 500 dropped 0.60% to 5,949.17.
- Nasdaq declined 0.64% to 19,107.65, marking its third straight losing day.
Powell’s Game-Changing Comments
The market downturn came after Fed Chair Powell stated that the central bank doesn’t need to “be in a hurry” to cut rates, citing the economy’s continued strength. This sent shockwaves through the markets, with rate cut expectations for December dropping dramatically from 82% to 59%.
Expert Analysis
Despite the market pullback, some analysts remain optimistic. CryptoQuant, an on-chain analytics firm, pointed to strong stablecoin inflows as a positive sign: “There is a continuation of a higher-than-normal influx of stablecoins. This suggests that barring any additional news flow, the Bitcoin bull market has not yet ended.”
Rekt Capital, a popular crypto analyst, offered a measured perspective: “Bitcoin dips early on in the price discovery phase are high-probability opportunities. As the parabolic phase goes on, however, the pullbacks will become increasingly riskier for dollar-cost-averaging.”
Economic Indicators Add to Market Pressure
Recent economic data has added to market uncertainty:
- Producer Price Index (PPI) rose 2.4% year-over-year in October.
- Core PPI climbed 0.3% monthly and 3.1% annually.
- Consumer inflation data showed persistent price pressures.
Looking Ahead
The market’s reaction highlights the delicate balance between economic strength and monetary policy. While Powell’s comments suggest confidence in the economy’s resilience, they’ve also reminded investors that the path to lower rates may be longer than previously hoped.
The global cryptocurrency market capitalization now stands at $2.92 trillion, reflecting a 1.53% decline in the last 24 hours. As markets digest these developments, investors are likely to keep a close eye on future Fed communications and economic data for clearer direction.