The crypto market is facing significant this week and the price of meme coins like Floki and Bonk are falling sharply today following a dire outlook from the Federal Reserve regarding inflation and the pace at which they plan to cut rates next year.
According to a statement from the Chairman of the United States central bank, the Federal Open Market Committee (FOMC) would now only cut rates twice next year instead of the four times they initially planned as they expect inflation to stay above their 2% target in 2025.
Fewer rate cuts mean less liquidity for the financial markets. This unexpected shift in the Fed’s monetary policy views is already causing a major correction in the markets and crypto assets are typically very susceptible to these news.
In the past 24 hours, BONK has seen its market value drop by 19.2% while FLOKI is down 23.7%. Meanwhile, the entire market cap of meme coins, as tracked by CoinMarketCap, has plunged from $137 billion on December 8 to $87.6 billion this morning.
This means that nearly $50 billion in market value has evaporated in a relatively short period.
Meanwhile, the accumulated losses of these two tokens in the past 30 days are even worse as $BONK has seen its price collapse by 53.2% while $FLOKI has experienced a milder drop of 38.8%.
FLOKI and BONK Could Soon Hit Critical Horizontal Supports
According to crypto analyst Altcoin Hunter on X, the price of $FLOKI could soon retest a major horizontal support at $0.00011. This threshold would serve as a stopping points for sellers in the near term.
Meanwhile, the Relative Strength Index (RSI) for Floki is entering oversold territory already. Although this does not necessarily mean that the price will stop dropping immediately, it is an indication that the selling spree may be already going too far.
In the case of BONK, the price could either retest the $0.000017 level or bounce off the trend line shown in the chart.
The vertical upswings that both digital assets experienced recently were unsustainable and a pullback was already due for most meme coins including BONK and FLOKI. However, the extent of this weakness may have been exacerbated by the unexpected comments of the Federal Reserve as market participants were caught off guard.
Investors may adopt a risk-off attitude moving forward until they see evidence that inflation is behaving differently than the Fed expects. For example, if prices start to increase at a pace below 2% within the next quarter, chances are that the crypto market will resume its uptrend in the near future.
For now, the market is just digesting the news and perhaps panicking over nothing. The severity of the drop – which extends to over 30% for many meme coins in the past 30 days at least – does justify the use of the word crash.
However, the year-to-date (YTD) performance of all of these assets has been outstanding. In the case of BONK, its price has experienced a 92.9% increase since the year started while FLOKI has seen even higher gains of 336.4% during this same period.
This Solana Project is Raising Millions in its Presale Despite the Market’s Weakness
This temporary weakness that the crypto market is experiencing is not deterring investors from pouring more money on a promising layer-two project for the Solana blockchain called Solaxy.
Its presale has raised nearly $3.5 million in the past 14 days as crypto enthusiasts believe that it solves a major source of concern for Solana developers – scalability.
As meme coins continue to gain traction and become an influential force within the crypto ecosystem, the Solana blockchain may start to struggle to process transactions rapidly and cheaply.
Enter Solaxy, an innovative layer-two solution that bundles transactions and processes them offline before they are recorded on the Solana mainnet. The project offers zero congestion, failed transactions, or delayed block inception.
The native token of the Solaxy project is $SOLX and it is currently available on presale at $0.001572.
Imagine buying Optimism or Arbitrum at their seed round price. Investors who bought $ARB in April 2019 has seen returns of 153X and you have the chance with $SOLX to reap similar gains once developers start to adopt it en-masse.
Visit the official website of Solaxy to get your hands on your first $SOLX.
Simply connect your wallet and convert USDT, ETH, or BNB in just a few clicks. If you don’t have a wallet, try out Best Wallet then.
Meanwhile, if you don’t own crypto at the moment, you can use a bank card to buy $SOLX as well.
The post Floki and Bonk Are Falling Fast – Could This Signal a Bigger Crypto Market Collapse? appeared first on Cryptonews.
