Prices of crypto currencies are falling across the board on Tuesday. Bitcoin, Dogecoins, and Solana are leading the charge, while new data from the economy is also causing a ripple effect in the cryptocurrency and stock markets.
Bitcoin’s price dropped by more than 4 percent from its previous price of almost $101,000. Ethereum and Dogecoin have fallen about 7% each on the same day. Solana is close behind, having dropped 6%.
The Federal Reserve’s decision to not cut interest rates in the first six months of 2025, as well as the fact that investors are no longer pricing in higher-than-expected job openings data in the United States has played a part.
Data from CoinGlass shows that crypto liquidations have soared following the correction in the market, and $385 millions worth of short and long positions were zeroed out over the past 24 hours. About $230 millions worth of liquidations occurred in just the last 4 hours, and long positions accounted for the bulk at $212,000,000.
Low interest rates have benefited the digital asset market because cryptocurrency prices are more volatile.
The central bank of the United States raised rates aggressively in 2022 in an effort to curb inflation in response to COVID-19, which made Bitcoin less attractive for investors.
But Bitcoin—along with equities—boomed last year on the Fed’s moves to finally lower the cost of borrowing. U.S. stocks also saw a price increase.
Bitcoin reached a record high in December of $108 135. The price of cryptocurrency surged after Trump won the U.S. presidency.
Federal Reserve Chairman Jerome Powell said in December the Fed would not continue to aggressively reduce interest rates, saying his team would do so. “be more cautious as we consider further adjustments to our policy rate.”
Editor by Andrew Hayward
Editor's note: This story was updated after publication with additional details.