$BTC
Bitcoin's recent downturn is closely tied to the overall market sentiment, particularly after the Federal Reserve meeting on Wednesday. The US central bank expressed heightened concerns about lingering inflation and forecasted fewer interest rate cuts in 2025 than previously projected ¹. This shift in monetary policy has led to a decline in riskier assets, including cryptocurrencies like Bitcoin.
As Yuya Hasegawa, a crypto market analyst, pointed out, "Monetary easing has almost always favored the price of bitcoin, and the opposite has a negative impact on the price". With interest rates expected to remain higher, investors are opting for safer, high-returning government bonds, which has resulted in a decline in Bitcoin's price.
The current market conditions suggest that Bitcoin may experience a period of consolidation before attempting to reclaim its recent highs. As of now, the price hovers around $96,073, representing an 11% decline from its all-time high.
Key Factors Contributing to Bitcoin's Decline:
- Federal Reserve's Hawkish Stance: The central bank's concerns about inflation and reduced interest rate cuts have led to a decline in riskier assets.
- Increased Interest Rates: Higher interest rates make government bonds more attractive, leading investors to shift away from cryptocurrencies.
- Market Consolidation: Bitcoin may experience a period of consolidation before attempting to reclaim its recent highs.
