Bitcoin, Ether Plunge 5% Ahead of Widely-Anticipated Fed Rate Cuts

Bitcoin started the week with a 3% decline, dropping below $58,400 amid shifting market sentiments influenced by expectations of potential interest rate cuts by the U.S. Federal Reserve. This decline marked a broader trend, with Bitcoin (BTC) also showing a 5% decrease overall.

Over the weekend, Bitcoin had traded above $60,000, buoyed by favorable U.S. economic data released late Friday. During this period, Bitcoin exchange-traded funds (ETFs) listed in the U.S. saw significant inflows, totaling over $263 million, the highest amount since July 22. Meanwhile, Ether ETFs experienced smaller inflows of $1.5 million, indicating ongoing investor interest in cryptocurrencies.

As Asian markets opened for trading on Monday, however, the crypto markets took a hit. Traders are anticipating that the Federal Reserve may implement its first rate cuts in over four years, which historically has stirred bullish sentiment in riskier assets. Polymarket bettors currently assign a 51% probability to a 50 basis points cut and a 48% chance for a 25 basis point reduction, with only a 2% chance of no change.

Ethereum (ETH) led the major cryptocurrencies in losses, dropping 5.5% in the last 24 hours—the largest single-day decline since early August. Cardano’s ADA fell by 5%, and Solana’s SOL saw a 4% decrease, while BNB Chain’s BNB performed relatively better with a 1.1% loss.

Among the few gainers, Nervos’ CKB surged by 10.5% in the past 24 hours, fueled by positive sentiment following its listing on the Korean exchange Upbit, known for its popularity in memecoins.

Futures traders betting on price increases faced substantial losses, with over $143 million wiped out during this sudden downturn, according to CoinGlass data. Additionally, the BTC/ETH ratio, which measures the relative performance of Bitcoin against Ethereum, fell to four-year lows, reflecting the ongoing competitive pressures on Ethereum.

Ethereum has faced significant competition over the past year, particularly from Solana, which has become a preferred platform for launching memecoins. Newer chains like Base and the Telegram-affiliated TON are also gaining traction, likely impacting demand for ETH.

In a related development, Sony’s Soneium blockchain is expanding, with the announcement that USDC will be integrated into the chain. While details regarding the amount to be issued remain unclear, this partnership with Circle marks a significant step for Soneium, further positioning it as a contender in the evolving blockchain landscape.