Bitcoin Falls Below $96K, CoinDesk 20 Tanks 10% Amid Fed-Driven Selloff; SOL Gives Up Election Rally Momentum

Federal Reserve Chair Jerome Powell’s hawkish remarks on interest rates have sparked significant volatility across global financial markets, triggering sharp declines in both traditional and cryptocurrency assets.

Crypto markets continued their downward trajectory on Thursday following Powell’s comments, which tempered investor optimism about aggressive interest rate cuts in 2024. Bitcoin (BTC) struggled to hold above the $100,000 mark, briefly stabilizing around $98,000 before renewed selling pressure pushed it below $96,000—a 4.8% drop over the past 24 hours.

Altcoins faced even steeper declines, with the CoinDesk 20 Index sliding more than 10%. Ethereum (ETH) plummeted 10.8% to below $3,500, while Cardano (ADA), Chainlink (LINK), Aptos (APT), Avalanche (AVAX), and Dogecoin (DOGE) recorded losses ranging from 15% to 20%. Solana (SOL) was hit particularly hard, plunging 26% from its recent peak and wiping out nearly all gains from its post-election rally.

Data from CoinGlass revealed that approximately $1.2 billion in leveraged crypto derivatives positions were liquidated over the past 24 hours, with over $1 billion of those being long positions—bets on rising prices.

Traditional markets were not immune to the turbulence. While U.S. stock indexes attempted a modest rebound from Wednesday’s lows, gains evaporated as the trading session progressed. The S&P 500 and Nasdaq ended the day only 0.5% higher.

The crypto market’s recent surge had been fueled by optimism surrounding pro-crypto policies expected from Donald Trump’s potential return to office. However, Powell’s firm stance on inflation control and a slower pace of interest rate cuts disrupted that narrative, leading to a broad-based selloff across multiple asset classes, including equities and gold.

The U.S. Dollar Index (DXY) soared past 108, reaching its highest level since November 2022, while 10-year U.S. Treasury yields climbed above 4.6%, their highest level since May.

“Bitcoin’s meteoric rise above $100,000 left the market vulnerable to a correction,” said Joel Kruger, market strategist at LMAX Group. “The Fed’s decision and Powell’s subsequent comments provided the catalyst for this pullback.”

Despite the market’s downturn, Azeem Khan, co-founder and COO of layer-2 network Morph, expressed a measured perspective. “When viewed against the backdrop of long-term growth, corrections like this are part of a healthy market cycle,” Khan noted. He also highlighted that year-end selloffs are often driven by tax-related strategies, as investors seek to balance gains and losses.

Looking ahead, market participants are expected to closely monitor upcoming economic indicators and central bank communications for clearer signals on the trajectory of both traditional and digital assets.