Bitcoin and Cryptocurrencies: The Reasons Behind the Decline

Why Are Bitcoin and Cryptocurrencies Falling?

Recently, Bitcoin, Ethereum, and other leading cryptocurrencies have shown a decline in response to the Fed's statements regarding interest rate cuts. In particular, the ambiguous remarks made by Fed Chairman Jerome Powell about future interest rate cuts have increased negative sentiment in the markets.

The Fed's Interest Rate Statements and Their Impact on the Crypto Market

Powell's comments regarding potential interest rate cuts in December drew attention. The chairman indicated that this cut was “not guaranteed” and also noted that there were disagreements among members of the Federal Open Market Committee (FOMC).

Despite interest rates decreasing by 25 basis points to a range of 3.75%-4%, Bitcoin and other crypto assets unexpectedly plummeted. Michael Pearce, the assistant chief economist at consulting firm Oxford Economics, emphasized that Powell's unexpected statements highlighted that the Fed's future moves have become more contentious.

Flight to Safety and Market Decline

The sharp decline observed in the digital asset market in recent days stems from investors seeking a “safe haven” in an uncertain environment. The selling wave that began on Wall Street quickly manifested itself in crypto assets as well.

Recent losses are as follows:

• Bitcoin (BTC): Fell by 1% to $109,000.
• Ethereum (ETH): Down by 2% to $842.
• Solana (SOL): Experienced a 4% loss.
• Cardano (ADA): Decreased by 4%.
• XRP: Dropped by 3%.

Examining the reasons behind these declines is very important for crypto investors. Although market uncertainty prevails, there are always opportunities for investors.