Today’s market downturn is driven by multiple factors, with BTC dropping 6.27% to $97,986.03. The Federal Reserve’s recent rate cut to 4.25%-4.5% and its signal of a slower pace for further reductions have dampened investor optimism. This adjustment has particularly impacted speculative assets like Bitcoin, which are highly sensitive to interest rate expectations.

Inflation concerns are mounting due to policies from the incoming U.S. administration, which may fuel further price instability. Bitcoin, often seen as a hedge against inflation, remains volatile as investors weigh potential risks. Additionally, thin holiday liquidity has amplified market fluctuations, worsening the sell-off across crypto and other markets.

Global economic indicators suggesting a slowdown have heightened fears of stagnation or recession, further unsettling investors. Policy uncertainty surrounding tariffs, tax reforms, and inflation management has compounded the cautious sentiment, leading to increased volatility in Bitcoin’s price.

Looking ahead, Bitcoin may test lower support levels near $78,941 or $73,483 due to overbought RSI levels and macroeconomic headwinds. However, improved liquidity and reduced uncertainty could push BTC back toward $108,353 by early 2025. Investors should closely monitor Federal Reserve policies and global economic data to navigate the ongoing volatility.

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