Crypto Prices Drop: Shiba Inu, Solana, Cardano React to Fed Meeting
Cryptocurrencies, including Shiba Inu, Solana, and Cardano, experience notable declines as tech stocks falter and the Federal Reserve's meeting approaches.
By Tylt Editorial Team
Shiba Inu, Solana, and Cardano drop 6-7% as markets adopt a risk-off stance.
Federal Reserve's January meeting sparks uncertainty about rate cuts.
Tech market selloff, fueled by a new Chinese AI competitor, impacts crypto performance.
Cryptocurrencies faced sharp declines on Monday as the broader market grappled with a tech stock selloff and lingering concerns ahead of the Federal Reserve's upcoming January meeting. Bitcoin, the leading cryptocurrency, saw a 4% drop, trading near $99,230. Altcoins like Shiba Inu, Solana, and Cardano experienced even sharper falls, declining by 6.1%, 7.1%, and 6.8%, respectively, by midday.
The tech-heavy Nasdaq Composite's 3% slide significantly influenced the cryptocurrency market, given the close correlation between these sectors. Market sentiment was rattled further by the emergence of DeepSeek, a new Chinese AI chatbot positioned as a cost-effective rival to OpenAI's ChatGPT, creating pressure on tech stocks globally.
Adding to this cautious sentiment is the Federal Reserve's rate-setting committee meeting, set to commence tomorrow. While the consensus among traders points to rates remaining unchanged, shifting expectations for future rate cuts have unsettled markets. Earlier projections of up to six cuts in 2025 have dwindled to just two, reflecting a reassessment of economic conditions. Persistent inflation, though slowing, remains above the Fed's 2% target, with December's CPI report offering only modest relief.
Cryptocurrency investors are also wary of the broader economic landscape, which has demonstrated resilience with strong job creation and rising consumer spending. Despite these challenges, analysts note that the fundamental underpinnings of major cryptocurrencies like Solana and Cardano remain strong, with their advanced technical frameworks continuing to attract long-term interest.
While altcoins like Solana and Cardano tend to be more volatile than Bitcoin, they still hold potential for significant gains in bull markets. However, speculative investments in these tokens should be approached cautiously, especially amid heightened market uncertainty. Shiba Inu, meanwhile, continues to be viewed as a high-risk asset with limited appeal for investors seeking stability.
Market volatility remains a defining characteristic of the crypto sector. Although the current risk-off environment has pressured prices, many believe that positive economic data, including the January jobs report and upcoming CPI readings, could provide renewed momentum in the weeks ahead.
