Federal Reserve Chair Jerome Powell’s hawkish remarks on interest rate cuts have triggered widespread turbulence across global financial markets, with cryptocurrencies experiencing significant declines.

Following Powell’s comments, which dampened investor expectations for substantial interest rate cuts in 2024, the crypto market extended its losses into Thursday. Bitcoin (BTC) failed to sustain levels above $100,000, sliding to the low-$97,000 range during U.S. trading hours. After briefly recovering to approximately $98,000, renewed selling pressure dragged BTC below $96,000, representing a 4.8% drop in the past 24 hours.

Altcoins bore the brunt of the selloff, with the CoinDesk 20 Index plummeting over 10% during the same period. Ethereum (ETH) plunged by 10.8% to trade below $3,500, while other major altcoins—including Cardano’s ADA, Chainlink’s LINK, Aptos’ APT, Avalanche’s AVAX, and Dogecoin’s DOGE—recorded losses ranging from 15% to 20%. Solana’s SOL suffered a severe setback, falling 26% from its recent all-time high and nearly wiping out its post-election rally gains.

CoinGlass data reveals that around $1.2 billion in leveraged crypto derivatives positions were liquidated in the past 24 hours, with long positions—bets on rising prices—accounting for over $1 billion of the total liquidations.

Traditional financial markets also faced pressure. Although U.S. stock indexes managed a modest rebound from Wednesday’s lows, gains were short-lived. The S&P 500 and Nasdaq closed the day up by just 0.5%.

Much of the recent surge in cryptocurrency prices had been driven by optimism about favorable regulatory policies expected under a potential second term for Donald Trump. However, Powell’s firm stance on inflation control and a cautious timeline for rate cuts delivered a sobering reality check, sparking selloffs across cryptocurrencies, equities, and even gold.

Meanwhile, the U.S. Dollar Index (DXY) soared above 108, its highest level since November 2022, while 10-year U.S. Treasury yields spiked above 4.6%, reaching levels not seen since May.

“Bitcoin’s rapid rise above $100,000 had already left the market vulnerable to a pullback,” said Joel Kruger, market strategist at LMAX Group. “The Fed’s decision and Powell’s comments served as the catalyst for that correction.”

Azeem Khan, co-founder and COO of layer-2 network Morph, took a more measured view. “When you consider the broader context of year-over-year growth, this pullback seems like a natural and even healthy correction,” Khan explained. He also noted that year-end selloffs are often driven by tax-related strategies, with investors offsetting gains with losses.

Looking ahead, market participants will be closely watching upcoming economic indicators and central bank updates for signals that could stabilize both traditional and digital asset markets.