Cryptocurrency markets slid lower on Thursday as investors digested the repercussions of Federal Reserve Chair Jerome Powell’s hawkish remarks about keeping financial conditions tight and interest rates high for longer.

The bitcoin (BTC) price declined to around $26,600, down 1.5% over the past 24 hours, barely budged by positive news about delaying payouts related to the Mt. Gox implosion, a long-time source of selling pressure scare in digital asset markets.

Ether (ETH) broke below $1,600 and extended its losing streak against BTC, falling to a fresh 14-month low against the leading crypto asset. ETH was down 1.8% during the day, similarly to the broad market-proxy CoinDesk Market Index (CMI).

Crypto majors suffered even steeper losses. Solana’s SOL, Polygon’s MATIC, Lido’s LDO and Optimism’s OP declined 3%-5% during the day.

Among crypto sectors, the CoinDesk Culture & Entertainment Index (CNE) defied the slump and gained 1% due to the strong performance by non-fungible token (NFT) platform ImmutableX’s native coin (IMX).

The Fed projected one more rate hike for this year and less cuts for next year, which stirred up traditional markets.

The 10-year Treasury yield surged to a 16-year high, while the DXY index, which gauges the U.S. dollar’s strength against a basket of major currencies, jumped briefly near 106, the highest since the peak of the U.S. regional banking distress in March.

U.S. equity markets sold off as a result, with the broad-market index S&P 500 losing 1.6% and the tech-heavy Nasdaq Composite Index plunging 1.8%.

Strain on the equity market due to the strict Fed policy could drag on crypto prices, according to digital asset trading firm QCP Capital.

“U.S. equity and rates markets have broken some very key levels on the back of this, and reflexivity can take over with the bearish thesis from here,” the QCP wrote in a Telegram market update. “This macro move could seep into crypto markets and take BTC lower with it, albeit with a lower beta as compared to other very stretched macro markets like the Nasdaq.”

Higher rates will also put pressure on embattled digital asset firms, jacking up their refinancing costs, per Edward Moya, senior market analyst at online brokerage platform Oanda.

“Borrowing costs will remain elevated and refinancing will be a nightmare for crypto firms,” he said in an interview with CoinDesk TV.

“Crypto not only needs rates to peak, but for rate cut bets to grow,” Moya added. “The Fed still believes the soft landing will happen, but a few more stickier inflation reports and that will make those 2024 rate cut bets disappear.”