Some reasons behind the dumb..

Several factors have contributed to this decline:

1. Federal Reserve’s Monetary Policy: On December 18, 2024, the Federal Reserve announced a 0.25 percentage point reduction in the federal funds rate. However, it also signaled a more cautious approach for 2025, projecting only two additional cuts instead of the previously anticipated four. This hawkish stance has led to tighter liquidity conditions, adversely affecting risk assets, including cryptocurrencies. 

2. Rising Treasury Yields: Following the Federal Reserve’s announcement, there was a notable increase in Treasury yields. Higher yields raise the opportunity cost of holding non-yielding assets like Bitcoin, prompting some investors to reduce their crypto holdings in favor of more traditional investments. 

3. Market Sentiment and Profit-Taking: Bitcoin surpassed the $100,000 mark earlier in December 2024, reaching a peak of $108,309 on December 17. This milestone led some long-term holders to realize profits, increasing selling pressure and contributing to the market’s decline. 

4. Broader Economic Indicators: The personal-consumption expenditures (PCE) price index for November rose by 0.1%, keeping the annual rate at 2.4%, above the Federal Reserve’s 2% target. This persistent inflation suggests that the central bank may maintain a restrictive monetary policy stance longer than previously expected, which can negatively impact speculative investments like cryptocurrencies. 

These combined factors have created a challenging environment for the cryptocurrency market, leading to the recent declines observed across various digital assets.