Bitcoin prices fell below $25,000 for the first time since mid-March as trading volumes waned and the Federal Reserve kept interest rates unchanged as forecast but warned of further rate hikes this year to fight inflation.

Data from cryptocurrency market tracker CoinMarketCap shows that at the time of writing, Bitcoin is trading at $24,995, down 3.8% over the past 24 hours. BTC has now lost 5.26% of its value over the past seven days. Crypto assets may be particularly vulnerable to the central bank’s forecasts of higher terminal interest rates later this year.

Bitcoin prices have been stable around $26,000 over the past few days as the market processes the SEC’s lawsuit against Binance and Coinbase, as well as growing macroeconomic concerns over the Federal Reserve’s interest rate signaling.

SEC lawsuit, hawkish Fed news hammer Bitcoin price

Benjamin Stani, head of business development and sales at cryptocurrency trading platform Matrixport, said the SEC’s lawsuit against two of the largest cryptocurrency exchanges was a major factor in the market’s recent decline. As a result, the value of most altcoins has also taken a hit.

The entire cryptocurrency market capitalization fell 2.7% to $1.02 trillion over the past 24 hours, while daily cryptocurrency trading volume fell 5.3% to $31.89 billion, CoinMarketCap data showed.

While the pause in rate hikes was widely expected, the Federal Open Market Committee hinted at future rate hikes in its statement, which typically curbs investor enthusiasm for risky assets such as cryptocurrencies.

The U.S. central bank has been gradually raising interest rates since the beginning of 2022, with the riskiest assets being affected the most. When interest rates rise, it becomes more expensive to borrow money, leading to lower levels of investment and consumer spending.

And due to the extended crypto winter, Bitcoin has been plunging since the beginning of the year. Analysts say that considering the recent poor performance of cryptocurrencies, it may take some time for Alpha Coin to stage a strong rebound and break through the key $27,000 or $28,000 levels.

XRP’s slump has a negative impact on the entire Bitcoin market

The XRP community is frustrated with Bitcoin’s continued suffering following the release of the Hinman document, which many expected to be a savior for the price of the token and its creator, Ripple, whose legal dispute with the SEC has yet to see closure.

These Hinman emails are crucial to the ongoing case between Ripple and the SEC. Whatever negative news emerges, it will affect the price of Bitcoin — and cryptocurrencies in general — in many ways.

Meanwhile, as technical factors come into play, IntoTheBlock reports that negative sentiment related to Bitcoin on Twitter has reached an all-time high. It highlights the relevance of the fact that in the past, large peaks have usually occurred before or after price lows.

On-chain analytics firm Santiment also reported that the amount of Bitcoin available for trading hit a new low since February 2018. Despite the ongoing lawsuit against Binance and Coinbase, traders are reportedly continuing to transfer BTC into self-custody.