Investing.com — Bitcoin prices fell on Thursday, extending a recent decline and drawing little support from a rally on Wall Street after the Federal Reserve signaled the possibility of an interest rate cut in September.
Sentiment towards cryptocurrency markets was largely capped by fears of a sell-off event by the US government, which was seen mobilizing around $2 billion worth of Bitcoin earlier this week.
Momentum from Republican presidential candidate Donald Trump’s positive promises about cryptocurrencies has also largely petered out, after a Bloomberg poll showed Democratic front-runner Kamala Harris erasing Trump’s lead in seven battleground states.
fell 2.9% over the past 24 hours to $64,256.2 as of 02:01 ET, having fallen as low as $63,599.5 earlier in the day.
Fed Talks Rate Cuts, But Bitcoin Sees Little Price Action
As widely expected, the Federal Reserve acted on Wednesday, with Chairman Jerome Powell signaling further progress toward cooling inflation and a weaker labor market.
Powell explicitly mentioned the possibility of a rate cut in September, especially in the event of more favorable data. His comments triggered a sharp rise on Wall Street.
Optimism about the Fed, coupled with positive gains from the tech sector, kept traders largely biased toward stocks, even as the prospect of lower US interest rates presented a positive outlook for cryptocurrencies.
Cryptocurrency markets thrive in low-rate environments as increased liquidity benefits their speculative nature.
But beyond US markets, risk appetite elsewhere in the world was less enthusiastic. Japanese markets slumped after the BOJ decision and pointed to further possible increases due to the growing resilience of the Japanese economy. Bank of Japan bonds rose after the BOJ decision, which put them at a near three-week low against the currency.
Rising geopolitical tensions in the Middle East following the assassination of a Hamas leader in Iran also kept risk appetite weak.
Cryptocurrency price today: XRP rally stalls, altcoins plunge
Cryptocurrency markets at large followed Bitcoin’s decline, with the coin falling 5.7%, reversing the course of a recent rally. The token had risen sharply on unfounded rumors that Bitcoin, the company that issues XRP, was close to settling with the Securities and Exchange Commission over a long-standing lawsuit.
The world's No. 2 token fell 3.7% to $3,179.26 an ounce, while and lost 6.9% and 5.1% respectively.
Among meme tokens, it fell by 3.9%.
