price Bitcoin He falls Less than $93,000 On Monday, it hit its lowest price in nearly a month — since November 26 — as the so-called Santa Claus rally failed to materialize and cryptocurrency charts looked as red as a holiday icon's suit.

Less than a week ago, the leading cryptocurrency was trading at record highs $108,000rising to a record price as the holiday season approaches. But in a Scrooge-like twist, the hawkish Fed lowered the price of the asset by expressing a further cut. Cautious approach To reduce interest rates next year.

Low interest rates tend to be favorable for Bitcoin and other “risk assets” such as stocks. As the cost of borrowing falls, investors typically look for riskier assets that can produce better returns than the returns that come with holding safer assets such as cash and US Treasury bonds.

When the Federal Reserve cut its benchmark interest rate by 25 basis points to a target range of 4.25% to 4.5% last week, policymakers signaled there would be fewer rate cuts next year than investors had previously expected. Among Fed officials, a majority expected to cut interest rates twice next year, down from four rate cuts expected by US central bank officials in September.

Inflation has slowed significantly since peaking at 9.1% year-over-year in June 2022, according to the U.S. Bureau of Labor Statistics. Consumer price index. Recording a 2.7% increase in the 12 months to November, the latest report showed inflation remains above the Fed's 2% target.

Powell explained that since the Fed began cutting interest rates in September, cutting the US central bank's benchmark interest rate by 100 basis points gave policymakers more room to maneuver.

“With today’s action, we cut the interest rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” Powell said. He said. “We can therefore be more cautious as we consider further adjustments to our interest rate.”

As market participants pondered the Fed's hawkish tone, the price of Bitcoin fell by 13% over the past week, while... Ethereum and SolanaIts shares fell by 18% and 15%, respectively $3300 and $186During the same period, according to CoinGecko data.

Among the alternative currencies, XRPThe price has held up $2.18 During the same period. The coins were also meme Hit hard Through the last market, DogecoinThe price fell by 22% to $0.31 During the last week.

Typically, a Santa Claus spike can appear during the last five trading days of the year, followed by the first two trading days of the new year, per Market monitoring. While the stock market will be closed on Christmas Day, cryptocurrencies will be traded around the clock, as always.

While the cryptocurrency market will likely see less trading activity during the rest of the year, that doesn't mean investors should hang their hats on Santa's prospects, according to BRN analyst Valentin Fournier.

“With institutional activity expected to decline and retail trading volumes expected to remain low over the final two weeks of the year, volatility should continue to decline,” he wrote in a note on Monday. “While continued negative momentum may lead to small losses, a sharp recovery is still possible.”

Modified by Andrew Hayward