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El Salvador has agreed to modify its Bitcoin policies as part of a $1.4 billion loan deal with the IMF, transitioning to voluntary Bitcoin acceptance for businesses and reducing public sector involvement in crypto activities. The government will also only accept tax payments in US dollars moving forward. Despite these changes, El Salvador continues to purchase one Bitcoin daily, maintaining a significant holding that has yielded substantial unrealized profits.
Arthur Hayes, former BitMEX CEO, warns of a potential "harrowing dump" in the crypto market around Donald Trump's inauguration, driven by unrealistic investor expectations. He anticipates a significant sell-off followed by a bullish reversal, while his fund plans to profit before the downturn. Contrastingly, firms like Matrixport and Standard Chartered predict a strong start for Bitcoin in 2025, with price targets reaching up to $200,000.
Ethereum is experiencing a significant outflow, with 7.8 million ETH withdrawn from Binance as part of a larger 20.8 million ETH exodus from exchanges, indicating potential long-term accumulation by holders. Currently trading at $3,858, ETH shows weaker performance compared to Bitcoin, with technical indicators suggesting a possible drop to support levels around $3,400. Meanwhile, Deutsche Bank is entering the Ethereum ecosystem with plans for a ZKsync layer-2 solution, highlighting the growing intersection of traditional finance and cryptocurrency.
Jerome Powell's recent statements following a modest 25 basis point interest rate hike have unsettled investors, as the Federal Reserve anticipates only two rate cuts next year due to persistent inflation concerns. The DAX is now in correction mode, with critical support at 20,000 points under threat, potentially leading to further declines towards the 19,703/19,681 range.
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Markets are bracing for a prolonged period of high interest rates following the Federal Reserve's recent policy decision, which raised forecasts for inflation and GDP growth while signaling caution on future cuts. The dollar surged, impacting emerging markets and tech stocks, with Micron Technology shares plummeting after disappointing earnings. Meanwhile, global central banks, including the Bank of England and Brazil's central bank, are navigating their own monetary challenges amid rising inflation and economic pressures.
The Federal Reserve's 0.25% interest rate cut triggered a swift liquidation of over $239 million in the crypto market, with Bitcoin briefly dipping below $100,000. Major cryptocurrencies, including Ethereum and XRP, also experienced significant declines, reflecting investor concerns about future rate cuts and inflation control. The overall market cap for meme coins fell nearly 8%, highlighting the widespread impact of the Fed's cautious stance.
The S&P 500 experienced its largest decline on record following a Federal Reserve decision on Wednesday. This significant drop highlights the market's reaction to monetary policy changes and investor sentiment in the wake of the announcement.
The crypto market is facing significant turmoil, with a 3.4% drop in total market value. Bitcoin briefly fell below $100K, while Floki plummeted 13.95% in a day, reflecting a broader sentiment shift. Ethereum saw a 5.08% decline but experienced a 40% surge in trading volume, indicating underlying investor interest amidst the chaos.
Bitcoin (BTC) is experiencing selling pressure ahead of the Federal Reserve's anticipated 0.25% interest rate cut, with current trading around $102,051.94. Despite this, strong buying activity suggests resilience, and traders are eyeing a CME futures gap near $102K as a potential buy-the-dip opportunity. A favorable FOMC outcome could reignite bullish momentum, shifting market sentiment towards a rally.
The Federal Reserve's recent hawkish stance, signaling a slower pace of interest rate cuts, has led to a surge in the US dollar, causing significant pressure on major currency pairs like AUD/USD, EUR/USD, GBP/USD, and USD/JPY. Traders are adjusting positions as the dollar strengthens, with AUD/USD nearing 2 ¼ year lows and USD/JPY sensitive to the divergence in monetary policy between the Fed and the Bank of Japan. Market expectations now reflect a reduced outlook for rate cuts in 2025, influenced by strong US inflation and economic indicators.
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