The Cryptocurrency Market Sees Significant Downturn
The cryptocurrency market faced a major downturn, with several assets, including Bitcoin (BTC), experiencing notable price drops over the past 24 hours. Bitcoin, the world’s largest cryptocurrency, recently reached an all-time high of $108,268.45. However, during press time, BTC was trading 6.63% below this peak, falling below the coveted $100,000 mark to a low of $98,792. This sharp correction has left investors questioning the cause behind such volatility.
Bitcoin’s Current Standing
At the time of writing, Bitcoin was trading at $100,997.17, marking a nearly 3% decrease in price over the last 24 hours. Despite the recent dip, Bitcoin experienced a bullish trend earlier in the month, climbing from $91,000 to its all-time high of $108,268.45.
The market capitalization of Bitcoin also dropped but remained impressive at $2 trillion, solidifying its position as the largest cryptocurrency globally. Interestingly, Bitcoin’s trading volume surged by 26%, reaching a high of $97 billion, indicating active participation despite the price correction.
Factors Behind the Market Decline
The recent market slump has been attributed to developments in the U.S. economy. Many BTC traders are reducing their exposure ahead of a significant interest rate announcement by the U.S. Federal Reserve. On Wednesday, the Fed lowered the federal funds rate to a range of 4.25% to 4.50%, cutting rates by 25 basis points. Simultaneously, the Federal Reserve adjusted its projection for PCE inflation by the end of 2025, raising it from 2.1% to 2.5%, signaling a potential rise in inflation in the coming year.
Commenting on these developments, prominent analyst Ali Martinez stated:
“It wasn’t today’s 25 bps cut that made markets freak out—it was the realization that inflation might stick around longer, and the Fed’s not quite ready to take its foot off the gas. Sentiment is shifting, and 2025 suddenly looks a lot less rosy. For now, keep calm, don’t panic sell, and remember: markets hate uncertainty, but they also thrive on it when the dust settles. Let’s see where this goes from here.”
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