ECB Maintains Rates at 2.15%, as Crypto Market Dips

ECB Holds Rates at 2.15% While Crypto Market Declines

The European Central Bank (ECB) has decided to pause its aggressive rate-cutting cycle, keeping key interest rates unchanged. The deposit facility remains at 2.00%, main refinancing operations at 2.15%, and marginal lending facility at 2.40%. This marks a shift in tone after eight rate cuts over the past year.

Inflation Holds Steady, Risks Still Loom

Inflation in the eurozone has stabilized near the European Central Bank target. Headline inflation for June was 2.0%, while core inflation came in at 2.3%. According to the ECB, domestic price pressures have continued to ease, with wage growth slowing in recent months.

Source: Tweet

The trend towards inflation can be attested to according to the expectations of the European Central Bank; however, uncertainty is increasingly threatening the world. The economic outlook is being held back by a stronger euro and revived trade tensions with the United States. 

The policymakers are also raising concerns on a possible 15% tariff between the U.S. and EU. Speaking of latest inflation, European Central Bank stressed its declared attitude toward a meeting-by-meeting strategy, data-driven and data-oriented.

ECB Reaffirms Commitment to Stability

The central bank confirmed that its bond-buying programs the Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) will continue winding down. The Eurosystem is no longer reinvesting matured securities, reducing its balance sheet gradually.

In addition, the ECB highlighted its readiness to act using all available tools if necessary. The Transmission Protection Instrument remains available to counter disorderly market movements that could disrupt monetary policy implementation.

Crypto Market Reacts To Pause

The crypto market showed a muted response to the ECB’s announcement. Bitcoin dropped below the $120,000 mark, currently trading around $118,000. Ethereum, XRP, and Solana also saw pullbacks, breaking through key support levels.

This is after markets rally of 30% since late June. Analysts report that this retraction is not something to be worried about but rather a normal rectification of market conditions. Technical indicators point at general trend being bullish in nature.

The stability within the crypto markets can only be transient since the dominance of Bitcoin has grown to over 61%, signaling a shift of investor interest towards BTC over altcoins. This recovery is built on the back of 8.5% decline in dominance during the previous part of the cycle.

The crypto markets is experiencing a downward trend, with several major cryptocurrencies showing notable 24-hour losses. BNB is trading at $764.09, down 3.00%, while Solana has dropped 3.74% to $184.59. 

Dogecoin, priced at $0.2344, leads the losses with a 5.44% decline. TRON has slipped 0.39% to $0.3109, and Cardano has fallen 3.13% to $0.8016.

Even though the overall crypto market is in the red, the trend is still in place. If the overall markets sentiment is good, then the altcoins like SOL may also follow the trend set by Bitcoin. Given the ECB par for the course till September, then the crypto markets may have room to rebound in the short to medium term.