How Major Finance Events in Crypto Markets Unfolded: Fed Policy Shift Triggers Broad Market Correction

Recent finance events have roiled cryptocurrency markets, with Bitcoin and altcoins experiencing sharp pullbacks in response to shifting economic signals. The pivotal moment came when policymakers signaled a cautious approach to future rate adjustments, disappointing investors who had grown accustomed to sustained gains throughout the previous months.

Federal Reserve’s Policy Shift Sparks Market Turmoil

The turning point in recent finance events occurred when Federal Reserve Chair Jerome Powell indicated that only two rate cuts would occur in 2025, fundamentally altering market expectations. This pronouncement sent shockwaves across digital asset markets, as investors who had positioned themselves for continued monetary easing scrambled to reassess their strategies.

Bitcoin’s attempt to sustain momentum above the psychologically significant $100,000 level quickly deteriorated. The flagship cryptocurrency retreated to the mid-$97,000 range before slipping further below $96,000 during the U.S. trading session, marking a significant pullback from earlier positions. By the most recent data available, Bitcoin has recovered to approximately $68.23K, representing a substantial bounce from those depths.

The broader market index measuring the top alternative assets, the CoinDesk 20, declined over 10% during this volatile period, underscoring how widespread the correction had become across the cryptocurrency ecosystem. Market strategist Joel Kruger from LMAX Group characterized the situation accurately: “The crypto market had been sitting on pins and needles around the possibility for a correction following the record run in the price of Bitcoin through $100,000. We got that catalyst from the world of traditional markets. Fallout from the Fed decision was simply too much to ignore.”

Altcoins Face Steeper Losses Amid Liquidation Wave

Alternative cryptocurrencies bore the brunt of the selling pressure that accompanied these major finance events. Ethereum fell to below $3,500 as investors fled riskier positions, though it has since recovered to $2.05K with a 6.92% gain over 24 hours. Cardano, Chainlink, Aptos, Avalanche, and Dogecoin all experienced double-digit percentage declines during the height of the correction.

Solana faced particularly acute pressure, sliding to its weakest level since early November and nearly erasing the impressive rally that had followed the U.S. election victory in November. The token plunged approximately 26% from its record highs before stabilizing. Recent data shows ADA rallying 10.44%, LINK up 7.78%, APT jumping 14.64%, AVAX gaining 9.90%, and DOGE advancing 8.23% as some recovery took hold.

The liquidation cascade accompanying these finance events was substantial, with approximately $1.2 billion in leveraged derivatives positions unwound across all assets, according to blockchain analytics. Long positions—bets that prices would appreciate—accounted for over $1 billion of those liquidations, illustrating how aggressively leveraged traders had been positioned heading into the Fed announcement.

The U.S. dollar index surged above 108, reaching its strongest level since November 2022, while 10-year Treasury yields jumped above 4.6%, marking the highest levels since May. These traditional market movements reflected the broad repricing across all risk assets following the Fed’s hawkish signal.

Understanding the Market Dynamics: Recovery Signals and Forward Outlook

What makes these finance events particularly noteworthy is the perspective offered by market participants observing the correction from a longer-term horizon. Azeem Khan, co-founder and operating officer of layer-2 network Morph, offered this assessment: “When you take a step back and consider the year-over-year growth trajectory, a pullback like this feels healthy and constructive. Year-end selloffs in securities markets can occur as investors manage tax positions, a pattern that may be contributing to current trends.”

The recovery that has since emerged suggests market participants are distinguishing between temporary volatility and structural shifts. Bitcoin’s current recovery to $68.23K, coupled with Ethereum’s rebound to $2.05K and strong performances from alternative assets, indicates that the immediate capitulation phase may have passed.

Technical analysts have identified key resistance levels that will determine whether the recent bounce signals a genuine recovery or merely a relief rally within a broader downtrend. Bitcoin’s ability to sustain levels around $72,000 and push through $78,000 will be critical in establishing whether a more durable uptrend is emerging.

Joshua Lim from FalconX noted that some portfolio managers are rotating into more volatile positions and derivatives markets, attempting to capitalize on the dislocations created by these finance events. Whether this enthusiasm proves justified will depend on whether fundamental support for cryptocurrency valuations can reassert itself amid shifting monetary policy expectations.

The interplay between traditional financial market signals and cryptocurrency sector dynamics—highlighted dramatically by these recent finance events—underscores how integrated digital assets have become within the broader financial ecosystem.