Cryptocurrency Market in Full Panic Mode as Interest Rate Hikes Take Toll

The cryptocurrency market took a significant hit on Sunday evening, with Bitcoin plummeting to levels not seen since February. The BTC maximalists' expectations for a colossal surge were buried under the weight of this nosedive.

Bitcoin dropped 12% in 24 hours and is now down 20% week-over-week. Ethereum fell back to December prices, plummeting 21% in a day and losing 30% in a week.

Ethereum has erased all its 2024 gains, falling 3% below its January 1st price. The CoinDesk 20 Index also took a hit, falling 12% in 24 hours.

The Bank of Japan's interest rate hike last week may have triggered this market downturn. The yen surged as a result, causing the Nikkei stock index to tank. Japan's woes spread to the U.S., with the Nasdaq dropping over 5% in two days and Nasdaq futures down 2.5% on Sunday evening.

The Federal Reserve held rates steady but seemed uncertain about a September cut, which had been anticipated by markets. Traders have already priced in a 100% chance of lower U.S. rates in September and a 71% chance of a 50 basis point cut.