Jerome Powell Sparks Market Selloff

Despite the expected 25 bps interest rate cut, FOMC Chair Jerome Powell’s hawkish remarks during his post-decision press conference rattled markets. Traditional assets, commodities, and cryptocurrencies all plunged, while the U.S. Dollar surged to a two-year high.

The key takeaways from Powell’s hawkish speech are as follows:

2025 Interest Rate Cuts: Only two rate cuts are expected to occur in 2025, in September, the sentiment was dovish and people were factoring in five rate cuts in 2025
Cautious Approach regarding cuts: Powell indicated that while the recent rate cut was appropriate, any further reductions would require clear evidence of sustained progress toward the Fed's 2% inflation target. He stated, "I think from here it's a new phase and we're going to be cautious about further cuts."
Trump Policy Uncertainty: Powell emphasised the uncertainty surrounding the potential economic impact of President-elect Donald Trump's proposed policies, including tariffs and immigration measures, and indicated that it is too early to determine how these policies might influence the economy and the Fed's policy decisions.
Bitcoin Holdings: Addressing questions about the Federal Reserve's stance on cryptocurrencies, Powell stated that the central bank is not permitted to hold significant amounts of bitcoin and has no intention of seeking changes to this policy.

Following Powell’s remarks, the US dollar reached a two year high, U.S. markets shed over $1.5 trillion in value. Gold dropped 2%, silver 3%, and Bitcoin 4%, while the broader crypto market suffered even deeper losses, with most altcoins down over 10%.

One positive takeaway from the market dip is the rise in Bitcoin dominance, as investors rotate from altcoins to Bitcoin. This trend underscores confidence in Bitcoin as a store of value during market turbulence. If Bitcoin dominance were falling alongside the market, it would signal broader concerns.

For opportunistic investors, this pullback presents a golden opportunity to accumulate discounted Bitcoin and altcoins. These dips are fast and rare in bull markets. Historically, those who act decisively during such corrections are handsomely rewarded, while hesitant investors often miss out. The strategy remains simple: buy Bitcoin, buy discounted altcoins, and hold.

FANTOM TO SONIC MIGRATION:

The highly anticipated Sonic mainnet is now live. Users have 90 days to freely migrate their funds between the Fantom blockchain and Sonic. After this window, a one-way bridge from Fantom to Sonic will remain, converting ‘$FTM’ tokens to ‘$S’ on a 1:1 basis.

For those holding $FTM with us, tokens will be automatically converted to $S at no extra cost unless requested otherwise. This migration marks a significant milestone for the project and its long-term prospects.

For investors feeling underexposed or worried about missing out, this is just the beginning. Strengthening your Bitcoin position or acquiring quality altcoins could yield substantial long-term gains. The crypto market is still in its early growth phase, providing believers with a prime environment to capitalise. Contact your Stormrake Crypto Broker today to seize this moment.

Stormrake Spotlight: Solana (SOL) ($207)

Solana has dropped 7.5% in the past day, presenting a compelling opportunity for dip buyers. Currently trading 28% below its all-time high, a recovery to previous highs could yield substantial returns for those brave enough to seize the moment.

BTC/USD Key Levels and Price Action:

We discussed yesterday that if the 55 EMA failed to hold, Bitcoin would likely turn bearish. Unfortunately, that scenario has played out. BTC has fallen below all moving averages and is now trading at the critical $100k support level. The structure and momentum remain bearish, but holding this key level could spark an attempt to break the bearish structure. For now, $100k remains a crucial level to watch.

BTC Total ETF Flows for 18 Dec: $ - 52.5 million

ETH/USD Key Levels and Price Action:

Ethereum has fallen 6.84% over the last 24 hours, breaking below all moving averages and through the critical $3,724 level. If bearish momentum persists, ETH is likely to test the next key support at $3,557. However, reclaiming $3,724 could be an early indication of a bullish recovery in momentum and structure.

ETH Total ETF Flows for 18 Dec: $ - 79.4 Million

*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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