KEY POINTS:
The cryptocurrency market faced an ongoing decline today, leaving investors concerned as Bitcoin and other major cryptos experienced a decline.
While CME FedWatch shows a 98.2% chance of leaving interest rate unchanged at their upcoming meeting, investors appear to be continuing to wait on the sidelines before moving on to other bets.
As the cryptocurrency market faces its recent decline, investors are now speculating on factors that could shape its near future.
Bitcoin and cryptocurrencies continue to show weakness on the third day of the week: What are the factors affecting this?
Why Is the Bitcoin Market Showing Weakness Today?
The cryptocurrency market faced an ongoing decline today, leaving investors concerned as Bitcoin and other major cryptos experienced a decline. There could be several factors potentially contributing to this decline as investors keep a careful eye on economic indicators and the upcoming Federal Reserve meeting. Therefore, let's take a look at the potential factors that could trigger the recent crypto market sell-off.
Investors are treading carefully as U.S. Consumer Price Index (CPI) data reveals a cooling inflation rate of 3.1% in November. Meanwhile, there is also recent data showing that inflation increased by 0.1% on a monthly basis, while the core CPI increased by 4% on a monthly basis.
Despite this decline, he eagerly awaits insights into the Fed's stance as inflation remains above the Federal Reserve's 2% target range. Currently, the market is longing for insights into the Fed's stance on potential interest rate hikes, which have profound impacts on global financial markets, including cryptos.
While CME FedWatch shows a 98.2% chance of leaving interest rate unchanged at their upcoming meeting, investors appear to be continuing to wait on the sidelines before moving on to other bets. In addition, the central bank's interest rate reduction decisions are one of the factors eagerly awaited by the market.
Another factor contributing to the market's recent decline may be investors taking profits from the apparent rise in the crypto market. Bitcoin, Ethereum and other major cryptos in particular have reached yearly highs in recent weeks as investors' appetite for risk increased due to the absence of any negative catalysts in the market.
Additionally, market participants are seeking clarity on the country's economic health, which could also be influential as U.S. Producer Price Index (PPI) data is due to be released later today. This important economic indicator can influence market sentiment as investors evaluate their bets in the digital asset space.
In an environment dominated by uncertainty, market participants are following these developments closely, aware that every piece of data has the potential to impact the crypto market in some way.
How Are Bitcoin and Cryptos Performing?
The global crypto market remained in negative territory throughout the week, as evidenced by the market's recent performances. Meanwhile, global crypto market cap fell 1.71% at $1.54 trillion at time of writing, with total market volume falling 11.94% to $70.76 billion.
The recent decline in the digital asset space in particular can be attributed to losses recorded in major cryptocurrencies BTC, ETH, SOL and others. At the time of writing, Bitcoin price fell 1.12% to $41,260, while Ethereum price fell 2.1% to $2,180. On the other hand, XRP price decreased by 2.04% to $0.6078, while transaction volume decreased by 10.6% to $1.51 billion. At the same time, the Solana price fell 6.02% to $66.18.
What Does the Future Bring?
As the cryptocurrency market faces its recent decline, investors are now speculating on factors that could shape its near future. The crypto landscape depends on key events, each of which has the potential to impact crypto market sentiment. The upcoming decision of the Federal Reserve determines the fate of the crypto market. A dovish stance could spark a comeback from the recent decline, while a hawkish approach could extend the ongoing market sell-off. Investors are broadly anticipating insights from the Fed because of its impact on the broader financial landscape.
At the same time, speculation surrounding the approval of the Bitcoin Spot ETF is huge, with the possibility that a potential approval could trigger a massive rally. On the other hand, the anticipated Bitcoin Barking event could also catalyze the bull run, and market observers are predicting the possibility of a subsequent Bitcoin hitting a new all-time high.
