The price of Bitcoin fell
The price of Bitcoin fell below $93,000 on Monday, marking its lowest point in almost a month since November 26. A failed Santa Claus rally and the crypto charts showing a sea of red contributed to the drop. Less than a week ago, the leading cryptocurrency was trading above $108,000, reaching a record high as the holiday season approached.
However, a hawkish Federal Reserve
However, a hawkish Federal Reserve dented the asset’s price by signaling a more cautious approach to rate cuts next year. Lower interest rates are usually favorable for Bitcoin and other “risk assets” like equities. As borrowing becomes cheaper, investors tend to seek riskier assets that could produce better returns than holding safer ones like cash and U.S.
Treasuries. The Fed lowered its
Treasuries. The Fed lowered its benchmark interest rate by 25 basis points to a target range of 4.25% to 4.5% last week. A majority of Fed officials now foresee two rate cuts next year, down from four rate cuts projected in September. Inflation has slowed since peaking at 9.1% year-over-year in June 2022, according to the U.S.
Bureau of Labor Statistics’ Consumer Price Index. Over the past week, Bitcoin’s price has fallen 13%, Ethereum’s price has dropped 18%, Solana’s has tumbled 15%, XRP’s has decreased 12%, and Dogecoin’s price has dropped 22%.
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