Why did the market fall sharply before Christmas? Jamie Coutts aânlyzes

The cryptocurrency market witnessed a sharp decline before Christmas, mainly due to the impact of the US Federal Reserve (Fed) meeting on December 18, 2024, when they decided to lower interest rates to zero. .25% but maintained a cautious stance on inflation, emphasizing that interest rates will remain limited until there is a significant improvement in the economic situation. Fed Chairman Jerome Powell made comments about there being only two possible interest rate cuts in 2025, which surprised and worried the market.

Jamie Coutts from Real Vision said the decline reflects reduced global liquidity, due to tightening monetary policy and bond market volatility. This particularly affected Bitcoin, causing its price to drop 7.2% within 24 hours of Powell's remarks. Many altcoins also recorded significant drops, with Ethereum down 10.7% and others like Solana and Dogecoin down as much as 16% and 26% on the week.

The current financial tightening makes it difficult for risky assets like cryptocurrencies to attract investment, as the US economy still has to balance between curbing inflation and maintaining growth. chief .