Hello friends! The world of cryptocurrencies has always been full of ups and downs, but what has happened to Bitcoin over the past few weeks has once again sent investors into a tizzy. This once-skyrocketing digital currency has now reached its lowest level in six months. People are left wondering is confidence in crypto wavering again?
Bitcoin saw a sharp decline on Friday, and with it, risky investments around the world also came under pressure. The biggest reason for this is the fading of expectations of an interest rate cut by the US Federal Reserve. When expectations fall, investment enthusiasm also begins to cool and this is the story playing out in the crypto world right now.
Market Anxiety Why is Bitcoin nervous about the Fed’s policies
Every Federal Reserve meeting is no less than a test for the crypto market. This time too, investors were hoping that the Fed would cut interest rates, which would have boosted risky investments. But as signs became clear that a rate cut would not occur in December, uncertainty spread across the market.
Bitcoin Kansas City Fed President Jeffrey Schmid also stated that inflation remains “very hot” and controlling it is the top priority. This statement further fueled investor panic, and the entire crypto market, including Bitcoin, came under pressure. Bitcoin While the probability of a rate cut in December was over 60% a week ago, it has now fallen to just 40%. This has led to increased selling pressure on riskier investments like Bitcoin.
Bitcoin’s Sharp Drop Prices Hit New Lows
Bitcoin fell about 2.3% to $96,564 on Friday afternoon. It briefly fell to $95,885, its lowest level in the past six months. Ether, or Ethereum, was also untouched. While it remained stable at the end of the day, it had previously fallen to a 10-day low.
Bitcoin Many experts believe this isn’t just a small drop, but a significant signal. Economist Dave Rosenberg said Bitcoin has now entered an “official bear market,” having fallen more than 20% in just one month. Furthermore, ETFs saw massive withdrawals $870 million was withdrawn on Thursday alone. And most shockingly since October 7th, the value of the entire crypto market has fallen by more than $1 trillion, or nearly 24%.
Will there be further declines in the coming days
The crypto world is always filled with uncertainty, but the situation currently seems a bit difficult. The Federal Reserve’s tone is hawkish, investors are hesitant to take risks, and market sentiment is weak. Analysts believe that Bitcoin’s near-term bullish hopes are low. While long-term investors are calling this a “discount buying opportunity,” new investors are better off exercising caution.
Frequently Asked Questions
Q1. Why is Bitcoin dropping so sharply?
Because expectations of a Fed interest rate cut have fallen, reducing investor appetite for risky assets like cryptocurrencies.
Q2. Is Bitcoin now in a bear market?
Yes. A 20% drop within a month places Bitcoin officially in bear territory.
Q3. Are ETFs affecting Bitcoin’s fall?
Massive ETF redemptions over $870 million in a day have intensified the sell-off.
Q4. Will crypto recover soon?
Analysts say the outlook remains bearish in the short term, largely dependent on economic data and Fed decisions.
Q5. Are other cryptocurrencies affected too?
Yes. Ether and many altcoins have also faced sharp declines amid the broader sell-off.
Disclaimer: The information given in this article is based on available news reports and market data. The cryptocurrency market is highly volatile. Before making any investment, seek expert advice and do your own research.
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