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Bitcoin prices dipped to a six-month low, sliding from below $92,000 to the $95,000s today. It’s quite a shift from just six weeks ago when it soared to a record high of nearly $126,000 in early October!
This sharp 30% drop has traders on edge, especially with lingering questions about if the Federal Reserve will cut interest rates at December’s meeting.
As per data from Bitcoin Magazine, today saw the price tumble to as low as $91,158.
The absence of key economic indicators due to last month’s 43-day government shutdown has made policymakers cautious. Fed Chair Jerome Powell remarked that “a further reduction in the policy rate…is not a foregone conclusion.”
Boston Fed President Susan Collins shared similar thoughts, indicating a possible need to keep policy rates stable for a while to balance inflation and job market risks.
Analysts highlight a significant change in market sentiment as a key factor in this crypto slump. Henry Allen from Deutsche Bank cautioned that investors shouldn’t overlook the effects of the Fed’s increasingly tough stance, which has often coincided with broader market sell-offs.
Even big institutions are pulling back — crypto ETFs experienced $1.8 billion in outflows last week, including a whopping $870 million yanked from Bitcoin products just on Thursday.
On top of that, the excitement around Donald Trump’s pro-crypto stance is dwindling. The much-anticipated November 2024 rally — sparked by hopes for friendly regulations and even a proposed Bitcoin treasury — took a hit after Trump mentioned imposing 100% tariffs on Chinese imports.
This sudden development triggered one of the largest liquidation events in crypto history, wiping out around half a trillion dollars in mere hours and leaving important assets struggling to bounce back.
Technical indicators aren’t painting a pretty picture either. Bitcoin’s price flashed a “death cross” on Sunday, a bearish pattern where short-term averages drop below long-term trends. However, analysts like Benjamin Cowen point out that past death crosses showed up near market bottoms, suggesting that a rebound could be right around the corner.
Other cryptocurrencies are also feeling the heat. Ethereum fell below $3,000 today and Solana has dropped around a third since early October, contributing to a massive $1 trillion loss across the crypto market.
Looking ahead, traders are keenly awaiting the Federal Open Market Committee’s December rate decision, which may dictate whether Bitcoin will see further declines or perhaps a festive “Santa rally” in the weeks to come.
Bitcoin price and crypto stocks continue to slide
Crypto-related stocks are also facing serious declines amidst market shakiness and falling cryptocurrency prices. As of now, Coinbase Global Inc (NASDAQ: COIN) is priced at $260.26 USD, down $23.74 (‑8.36%) today, reflecting lower trading activity and shrinking fee revenue as Bitcoin struggles.
Strategy Inc Class A (NASDAQ: MSTR) is currently at $191.59 USD, down $8.16 (‑4.09%), indicating a strong correlation with Bitcoin’s recent dip. Miners are also feeling the pressure, with MARA Holdings Inc (NASDAQ: MARA) down $0.85 (‑7.10%) at $11.14 USD and Riot Platforms Inc (NASDAQ: RIOT) down $0.49 (‑3.55%) at $13.46 USD.
Recently, Strategy made its largest Bitcoin purchase since summer, acquiring 8,178 BTC last week for about $835.6 million. According to SEC filings and Michael Saylor’s posts on X, they bought at an average price of $102,171 per bitcoin, bringing their total holdings to 649,870 BTC with a total cost of roughly $48.37 billion and an average price of $74,433 per coin. Strategy reported a Bitcoin yield of 27.8% year-to-date.
At the announcement time, Bitcoin was valued around $94,000, while Strategy’s stock ($MSTR) was down about 2% in premarket trading, sitting at $195.86. This recent acquisition mostly stemmed from issuing preferred stock.
Earlier this month, the company raised about $715 million through its newly launched euro-denominated preferred series, STRE (“Steam”), aimed at enhancing high-yield offerings to European investors. This highlights Strategy’s unwavering commitment to bolster its Bitcoin exposure while cleverly using financial tools for significant purchases.
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