Federal Reserve’s Decision Triggers Major Crypto Market Losses
Following the Federal Reserve’s decision on July 31 to maintain the current interest rates, the cryptocurrency market experienced significant downturns. Notably affected was SPX6900 (SPX), BlackRock’s third-largest holding after Bitcoin (BTC) and Ethereum (ETH).
Impact on SPX6900 (SPX)
The meme coin SPX saw a dramatic drop of 17.44% within 24 hours post-announcement. This decline came just days after SPX was celebrated as the top-performing cryptocurrency over the prior three months. Consequently, SPX6900 has become the largest loser among the top 100 cryptocurrencies by market capitalization in the past day.
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At the time of writing, SPX, potentially linked to BlackRock’s portfolio, was trading at $1.64. Its market capitalization was approximately $1.54 billion, with a daily trading volume around $129.1 million.
Understanding SPX’s Downtrend
The sharp decline follows an impressive 204% rally over the last 90 days, leaving SPX susceptible to correction pressures. On August 1, technical indicators turned bearish, with SPX6900 breaking beneath a rising wedge pattern, hinting at a potential reversal of its upward trend.
The breakdown was further highlighted by widened Bollinger Bands (BB), as the price dipped below the middle band. Simultaneously, the moving average convergence divergence (MACD) histogram entered negative territory for the first time since mid-July.
Market-Wide Implications
The situation with SPX is not isolated. The cryptocurrency markets collectively lost $150 billion amid new tariff discussions, with the overall market cap dropping from $3.89 trillion to $3.74 trillion.
Altcoins were hit hardest in this downturn. The Altcoin Season Index fell sharply to 34, while SPX’s 30-day correlation with BTC increased to 0.82.
Conclusion
The Federal Reserve’s decision has had a ripple effect across the cryptocurrency landscape, significantly impacting major holdings like SPX6900. As the market adjusts to these changes, investors are keenly monitoring for signs of stabilization or further volatility.
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