PakGazette– Bitcoin fell on Wednesday, extending overnight losses and reversing a recent rally, as growing concerns about slower interest rate cuts in 2025 sparked deep losses in risk assets.
The world’s largest cryptocurrency had briefly surpassed the coveted $100,000 level, marking a prolonged recovery from a late December decline. But losses on Tuesday and Wednesday caused the cryptocurrency to erase its entire recovery, leaving it back within sight of the late December lows.
fell 0.3% to $96,607.7 at 00:49 ET (0549 GMT), after losing more than 5% on Tuesday.
The cryptocurrency was also subject to some profit-taking after posting a stellar 2024. Most of Bitcoin’s gains came after Donald Trump’s victory in the presidential election, as he had promised to implement cryptocurrency-friendly policies.
But crypto markets were now awaiting more signs about Trump’s political plans when he takes office on January 20.
Rate jitters hit Bitcoin
Losses in Bitcoin came in tandem with broader risk-driven markets, as better-than-expected U.S. economic data fueled concerns that the Federal Reserve will cut interest rates at a slower pace in 2025.
The November data was better than expected and was released just days before December data, which is expected to offer more definitive signals on the labor market.
The better-than-expected December data, while presenting a brighter picture of the U.S. economy, also raised concerns that inflation will remain stable in the coming months, giving the Federal Reserve even more impetus to slowly cut rates. of interest.
The central bank had cut its outlook for interest rate cuts in 2025 during its December meeting, citing concerns about sticky inflation and confidence in the labor market.
Fed officials reiterated this message earlier this week.
Higher rates for longer bode poorly for speculative assets like cryptocurrencies, as they limit the amount of liquidity that can be deployed in the sector. This trend had affected the crypto markets throughout 2022 and most of 2023.
Crypto Price Today: Altcoins Track Bitcoin Losses
Broader cryptocurrency prices fell following Bitcoin, also erasing the recovery seen over the past week. Losses in several major altcoins were much steeper than those seen in Bitcoin.
The world’s No. 2 cryptocurrency fell 8.4% to $3,360.35, while the world’s No. 3 cryptocurrency fell 5.1% to $2.3084.
Analysts at Compass Point Research said Ether is likely to outperform Bitcoin this year as friendlier US regulations will cause investors to diversify away from the world’s largest cryptocurrency.
and fell by 8% to 12%, while among meme tokens, it fell by 11%.
