Crypto investors sent bitcoin and most major altcoins tumbling early Thursday in what appeared to be a delayed reaction to hawkish remarks by U.S. Federal Reserve Chair Jerome Powell just minutes after the central bank left borrowing rates intact.

The largest cryptocurrency by market capitalization was recently trading at $26,605, down more than 2.2% and its lowest point in four days. BTC dipped near $26,400 in the early morning hours. It had been hovering above $27,000 for much of this week as investors embraced encouraging economic news from China and the Fed’s widely expected softer turn on monetary policy. But Powell suggested the Fed would consider raising the interest rate again, reiterating the bank’s commitment to achieving its goal of an annualized 2% inflation rate.

“Bitcoin had its initial reaction to the Fed, keeping rates the same,” said Lawrence Lewitinn, director of content at crypto information services provider The Tie. “There was no surprise there. The subsequent follow-up that we saw this morning is like round two, but this is more of a reaction to what the equity markets and other markets are doing, which is all of a sudden taking repeated warnings that they (FOMC) were going to raise rates more than they are today.”

Lewitinn added that this probably won’t last long. That reaction is not going to change much, even if the Fed stays higher for longer or raises rates one more time.”

Altcoins Drop

Ether was recently changing hands at $1,585, down about 2.6% from Wednesday, same time and off more than 4% from its highs earlier in the week. A number of other major altcoins nosedived early Monday with TON, the token of layer 3 blockchain infrastructure provider Toncoin, dropping more than 8% at one point before regaining some of the lost ground. TON was recently off 3%, while OP, the native crypto of layer 2 network Optimum Foundation, was more than 5% in the red, its losses following the announcement that the Optimum Foundation behind the protocol had sold about $157 million of the digital currency.

In comments to Unchained, Strahinja Savic, head of data and analytics at crypto advisory platform FRNT Financial, noted that the price ratio of ETH to BTC is at its lowest level (0.06) since July 2022. “The risk appetite in crypto has really been wiped out, and assets other than BTC are bearing the brunt of that,” Savic wrote, adding: “It’s very possible that we see BTC’s share in the aggregate crypto market cap to continue to trend upwards.”

U.S. stocks dropped amid the renewal of investor fretfulness about a future Federal Reserve interest rate hike that could hamstring the economy and unsettle asset markets. The tech-heavy Nasdaq and S&P 500, which has a hefty technology component fell 1.5% and 1.2%, respectively. Meanwhile, U.S. Treasury yields continued to climb with the yield on a 10-year bond reaching a 16-year high – a reflection of the concern about interest rates.

Binance Concerns

The Tie’s Lewitinn believes that severe job cuts at the U.S. unit of Binance, the world’s largest crypto exchange by trading volume, and growing regulatory scrutiny were weighing on markets. In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, Changpeng “CZ” Zhao, for securities violations.

“It’s a lot of headaches, regardless of whether Binance is called culpable. This is where the liquidity is, this is where the market is,” he added.

In a message to Unchained, Riyad Carey, research analyst at digital asset data platform Kaiko, wrote that bitcoin is likely to remain in its recent range between $25,000 and $30,000. “It seems that the market needs some sort of catalyst – whether spot ETF approval or change in macro conditions – to mount any serious rally,” Carey wrote, noting that volumes continue to be at multi-year lows while liquidity is relatively stable, meaning volatility and price moves should continue being rather muted.”