Bitcoin Posts First Weekly Drop in Months Amid Fed Rate Hikes

Bitcoin falls 7% in its first weekly decline since September, driven by Federal Reserve rate hikes and investor caution. Broader crypto market also drops 10%.

Dec 23, 2024 - 00:08
Dec 23, 2024 - 00:08
 12
Bitcoin Posts First Weekly Drop in Months Amid Fed Rate Hikes
Bitcoin Posts First Weekly Drop in Months Amid Fed Rate Hikes

Bitcoin has logged its first weekly decline in months, dropping more than 7% in the past seven days. As of Monday morning in Singapore, the cryptocurrency was trading at approximately $94,344, marking a steep fall from its record high of $108,000 earlier this month.

The broader crypto market wasn’t spared either, with popular tokens like Ethereum and Dogecoin contributing to a 10% overall market drop. The downturn reflects growing concerns among investors following the U.S. Federal Reserve’s latest policy moves.

Last week, the Federal Reserve raised interest rates for the third consecutive time and signaled plans to slow monetary easing in 2025 to control inflation. While these actions aim to stabilize the economy, they have added pressure on risky assets like cryptocurrencies, leading to sell-offs and reduced optimism in the market.

Get Your Domain at Name.com

Advertisement

Bitcoin’s performance has also been impacted by a record outflow from U.S.-based Bitcoin exchange-traded funds (ETFs). Institutional investors appear to be pulling back as market uncertainty grows. Analysts caution that Bitcoin must maintain its $90,000 support level to prevent further declines. “Breaking below this level could lead to a wave of liquidations,” said Sean McNulty, director of trading at Arbelos Markets.

Despite the recent setbacks, some market experts remain optimistic about Bitcoin’s long-term prospects. David Lawant, head of research at FalconX, predicts that Bitcoin could regain momentum in early 2025. However, he warned of potential short-term volatility, particularly with a significant options expiry event looming on December 27.

MicroStrategy, a company well-known for its substantial Bitcoin holdings, is also under scrutiny. Traders are closely watching whether the firm will continue its aggressive buying strategy, which could influence Bitcoin’s price trajectory.

Although Bitcoin remains up nearly 37% since Donald Trump’s election victory, the road ahead is uncertain. Macro-economic challenges and investor caution are likely to keep the crypto market volatile as the year draws to a close.

Also Read: Bitcoin Hits $108,000 as Cardano and Litecoin Gain Investor Interest

iShook Opinion Curated by iShook Opinion and guided by Founder and CEO Beni E Rachmanov. Dive into valuable financial insights at ishookfinance.com for expert articles and latest news on finance.