The cryptocurrency market is experiencing a significant sell-off on Thursday, with Bitcoin’s price down 4.8% over the past 24 hours and Ethereum’s price down 9.2%. The altcoin space is also feeling the pain, with meme tokens like Shiba Inu and Cardano taking a hit.
Shiba Inu, which has seen its value rise by 107% in 2024, fell 11.5% over the past day, while Cardano dropped 11.5%. Chainlink, another altcoin, was down 13.2%.
The Fed’s interest rate decision is to blame for the sell-off. The central bank announced a 25-basis point cut in interest rates, which marked its third rate reduction since September. Chairman Jerome Powell signaled that the Fed will take a more cautious approach to rate reductions in 2025, citing concerns over inflationary pressures.
The move has sent shockwaves through the market, with crypto prices experiencing substantial sell-offs. Lower interest rates typically act as a bullish catalyst for cryptocurrencies, but the less favorable rate outlook is driving declines for Shiba Inu and other tokens.
Despite its recent rally, Shiba Inu’s token price is still heavily influenced by speculative investing and meme coin momentum. If macroeconomic conditions take a turn for the worse or other disruptive risk factors arise, it’s likely that the cryptocurrency will see significant downside pressures.
Cardano and Chainlink, on the other hand, have more substantial fundamental valuation cases. Both tokens are backed by networks with multiple projects and applications, which could help them weather volatile market conditions.
In the near term, investors can expect valuations for top altcoins to remain highly volatile. Token prices will continue to swing as investors weigh the impact of next year’s interest rate schedule against potential benefits from regulatory shifts under the incoming Trump administration.
Source: https://www.fool.com/investing/2024/12/19/why-shiba-inu-is-sinking-today