The cryptocurrency market is under huge pressure with falling prices, weak momentum, selling pressure, and low trading volume. The total crypto market cap witnessed a massive dip from $2.55 trillion to $2.44 trillion in the last 24 hours, with Bitcoin leading the decline. Is it a healthy crypto correction or the crypto bull losing its momentum?
Fed’s Frozen Pivot The Global Crypto Market is Draining
Bitcoin wiped out its weekly gains and crashed to a critical support level following the speech delivered by Federal Reserve Chair Jerome Powell on Wednesday. During the press conference, Powell announced that the FOMC would hold the interest rate between 3.50%-3.75% as the economy is in a wait-and-see phase. The FOMC confirmed that interest rates will remain unchanged, as inflation persists above the 2% target and economic growth remains robust amid heightened geopolitical uncertainty.
Fed’s announcement of no immediate interest rate cut has dramatically impacted the crypto market, with prominent players BTC, ETH, and SOL exhibiting a sharp market correction followed by massive net outflows. The entire crypto market witnessed a price reversal followed by the Fed’s cautious stance about the interest cut in the midst of inflation concerns. While interest rates remain high, investors are reducing exposure to highly volatile assets like crypto, causing coins like BTC to experience a price fall.
In early 2026, BTC mostly hovered around $70k, fostering many long positions anticipating a post-Fed rally. However, those long positions were liquidated when the Fed delivered a hawkish update, leading BTC to drop to $69,985.18, marking a 4.9% decline over the past 24 hours.
Inflation Data Impacted Investor Confidence Leading to Massive Selling
The cryptocurrency market has been experiencing a significant backdrop since late February, when Israeli and US forces launched strikes in Iran, leading to the forced closure of the Strait of Hormuz, the maritime route for tanker traffic. The Hormuz effect, which led to high energy prices and hot inflation data from the US, led to an immediate crash in crypto prices, with Bitcoin falling from as high as $74,700 to an intraday low of $69,985.18. Bitcoin crashed at $70K when the US released the Producer Price Index, which reflects a high inflation rate. As the interest rate is rising, investors have started to pool their investment from highly volatile assets like crypto to safer and higher-yielding assets. This led BTC to experience massive selling pressure with significant outflow totalling $72 million in the past 24 hours from Bhutan and large Bitcoin holders.
Besides the inflation data and the Fed’s cautious signals, several other reasons, like massive liquidations, push BTC back to $70k. Crypto market reports 135,000 liquidations, with BTC leading the falls. Bitcoin liquidations surged by 140.22% to reach a total of $150.85 million.
The overall crypto market is experiencing a downturn followed by massive economic headwinds and geopolitical uncertainties. A cautious stance by the Fed on interest rates in the midst of rising inflation slowed investor appetite for high-risk assets. Additionally, the rising energy prices and hotter-than-expected inflation data reduced the near-term easing of monetary policy. This has amplified the selling pressure across the market, specifically BTC, to crash at the $70K level, erasing all the recent gains.
