Price of Bitcoin fell Under $93,000 Monday, hitting its lowest price in nearly a month—since November 26—as a so-called Santa Claus rally failed to materialize and the crypto charts looked as red as the holiday icon's suit.
A little more than a month ago, Bitcoin was the most popular cryptocurrency. $108,000As the holidays approached, the price of rose to an all-time high. In a Scroogelike turn, the Federal Reserve said that it would be more prudent to hold onto assets. A cautious approach Rates to be cut next year
Bitcoin and other digital currencies tend to do better with lower interest rates. “risk assets” like equities. Investors are increasingly looking for riskier assets to generate higher returns.
The Fed’s decision to lower its benchmark rate to the target range of 4.25 to 4.5%, by 25 basis point last week was a signal to investors that there will be less rate cuts in 2019 than they had anticipated. Fed officials predict that there will be two rate reductions next year. That’s down from the 4 rate cuts forecast by officials of the U.S. Central Bank in September.
The U.S. Bureau of Labor Statistics reports that the rate of inflation has slowed down dramatically from its peak of 9.1% in June of 2022. Consumer Price Index. Despite a recent report showing a 2.7% inflation rate in the year through November, it still remained above the Fed’s 2% goal.
Powell explained that since September when the Fed first began to cut interest rates, a reduction of 100 basis points in the U.S. federal bank’s benchmark has provided policymakers with more flexibility.
“With today’s action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” Powell You can also read about the importance of this in our article. “We can therefore be more cautious as we consider further adjustments to our policy rate.”
Bitcoin has dropped 13% in the last week as market participants pondered the Fed’s hawkish stance. Ethereum You can also find out more about the following: SolanaThe s and s respectively fell 18% to $3,300 You can also find out more about the following: $186CoinGecko’s data shows that the value of bitcoin has increased by a factor of ten over this period.
Alternative currencies are also available. XRPPrice of has barely changed, but it is still down 12%. $2.18 The same time span. The meme coin has been around for a while. hit hardest The recent market route DogecoinThe price of has fallen by 22%. $0.31 Over the last week.
Santa Claus rallies are usually seen during the five last trading days in the previous year and the two first trading days after the New Year. MarketWatch. While the stock exchange will be closed for Christmas Day, the crypto market will continue to trade around the clock as usual.
While the crypto market will likely see less trading activity through the rest of the year, that doesn't mean investors should hang their hats up on Santa’s prospects, according to BRN analyst Valentin Fournier.
“With institutional activity expected to decline and retail trading volumes anticipated to remain subdued during the final two weeks of the year, volatility should continue to decrease,” He wrote in an Monday note. “While the ongoing negative momentum could lead to small losses, a sharp rebound remains possible.”
Andrew Hayward is the editor