- Major cryptocurrencies fell after the Federal Reserve held its benchmark rate at 3.50%–3.75% but projected possible hikes in 2026, with Bitcoin dropping to about US$64,100 (AU$91,026).
- Ether, XRP and Solana each declined roughly 3%, while more than US$150 million (AU$213 million) in leveraged short positions were liquidated during the session.
- The decision was Kevin Warsh’s first as Fed chair, with nine of 18 officials penciling in a 2026 rate increase and any cuts pushed into 2027 and 2028.
Major cryptocurrencies declined on Wednesday after the Federal Reserve left interest rates unchanged but struck a hawkish tone in its latest projections, sending Bitcoin from an intraday high near US$66,315 (AU$94,167) down to about US$64,100 (AU$91,026).
The Federal Open Market Committee voted 12–0 to hold the benchmark federal funds rate at 3.50%–3.75%, its decision landing more hawkish than markets had positioned for. The meeting was the first chaired by Kevin Warsh, who took over after Jerome Powell’s term ended in May.
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A Hawkish Surprise
The shift came not from the rate itself but from the Fed’s updated projections. Nine of the committee’s 18 participants penciled in a 2026 rate hike, and the so-called dot plot erased an earlier signal of a cut this year, pushing any reductions into 2027 and 2028.
Committee members projected inflation rising toward an annualised 3.6% by year-end, citing higher energy prices.
For risk assets, the message landed as a headwind. A more hawkish Fed implies a stronger dollar and higher yields, both of which tend to weigh on cryptocurrencies, and traders moved quickly to reprice the path of policy.
The Fed’s inflation concern drew partly on higher energy prices, a pressure point that has kept the committee cautious about easing even as growth slows.
Broad Declines Across Majors
Ether fell about 3.21% to around US$1,734 (AU$2,462), XRP dropped roughly 3.47% to about US$1.17 (AU$1.66), and Solana slid about 3.32% to near US$71.20 (AU$101).
The synchronised move underscored how closely the major tokens still track shifts in the macro outlook.
The volatility also triggered forced selling. More than US$150 million (AU$213 million) in short positions were liquidated as prices briefly spiked above US$66,000 before reversing, with market data pointing to dense leverage clusters between US$64,500 and US$65,000 (AU$91,600 to AU$92,300) that amplified the drop.
Despite the pullback, some analysts maintained that underlying demand for leading digital assets remains intact, framing the slide as a repricing of rate expectations rather than a change in the longer-term trend.
That view, however, remains a market read rather than a forecast, and it sits against a backdrop of thinner spot volume that traders say leaves prices vulnerable to further swings.
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