Cryptocurrency markets experienced continued pressure during U.S. trading hours on Thursday, following a pullback that began the previous day after the Federal Reserve’s announcement of expected rate cuts. The price of ether (ETH) saw a brief increase after U.S. Securities and Exchange Chairman Gary Gensler mentioned the possibility of spot ether ETF approvals by the end of the summer. However, this news only resulted in a short-lived 1% increase in ether’s price, which then dropped by over 3% just an hour later. As of the latest update, ether was trading at $3,440, showing a 5% decrease over the past 24 hours. The broader CoinDesk 20 Index also experienced a 4.9% decline in the same period.
Bitcoin (BTC) was not immune to the market downturn, as its price fell by nearly 5% and was close to a one-week low of $66,300. The negative trend in the cryptocurrency market was initiated following the Federal Reserve’s hawkish policy meeting, where it was indicated that only one rate cut of 25 basis points was expected in 2024, contrary to the previous market expectations of two to three cuts this year.
Despite positive developments such as improving inflation data, the approval of spot ETH ETFs, and other bullish news, the cryptocurrency market failed to sustainably rise. Analysts, including Skew, noted that the market seems to be stuck at around $66,000, indicating a state of equilibrium. Moreover, U.S. economic data released on Thursday further dampened the market sentiment, showing a decrease in both inflation and economic growth. The May Producer Price Index (PPI) fell by 0.2%, below the expected increase of 0.1%, while the year-over-year PPI was 2.2% versus the forecasted 2.5%. Initial jobless claims also rose to nearly a one-year high of 242,000, exceeding the expected 225,000.
Despite the anticipation surrounding the approval of spot ETH ETFs and other positive news, the cryptocurrency market continues to face challenges in sustaining an upward trend. The impact of macroeconomic factors, such as the Federal Reserve’s rate cut projections and economic data releases, continues to influence the market sentiment. As investors navigate through these uncertainties, the cryptocurrency market remains in a state of flux, waiting for a clear direction to emerge amid changing market dynamics.
