The price of Bitcoin has plunged to its lowest level in seven months, hitting $93,043 ($142,362) on Monday morning as a wave of selling swept through the market. This decline follows a week-long sell-off that intensified due to concerns regarding the US Federal Reserve”s monetary policy direction.
Traders had anticipated a cut in interest rates during the Fed”s upcoming meeting on December 10. However, uncertainty surrounding this expectation has led to increased selling pressure. Cameron Gleeson, a senior investment strategist at Betashares, remarked, “People thought the US Fed cutting (rates in December) was a foregone conclusion, but now it”s unclear, so that”s prompted some selling.” This sentiment reflects broader market apprehensions, which have triggered a risk-off mentality among investors.
Despite the recent downturn, Bitcoin remains approximately 30 percent higher since President Trump”s election victory on November 5, 2024, as his administration has been perceived as pro-cryptocurrency, aiming to deregulate the sector.
Last week proved particularly challenging for the cryptocurrency market, with a staggering $2.8 billion in net outflows from exchange-traded funds (ETFs), including a record single-day outflow from Blackrock”s flagship product. Rachel Lucas, a strategist at BTC Markets, noted that this exodus of institutional investment coincided with Bitcoin falling below critical technical levels tied to its moving average, further exacerbating the sell-off. “It”s a perfect storm of institutional outflows and technical stress,” she explained.
Additional cryptocurrencies such as Ethereum, Solana, and XRP have also experienced significant declines over the past week, illustrating Bitcoin“s continued influence on the broader market. Lucas highlighted that “Bitcoin tends to move the whole market and the other coins move in lockstep with it.” Historically, Bitcoin markets have tracked the fluctuations of Wall Street closely, with US share futures remaining flat as of Monday morning.
