Bitcoin Price Today Falls to $92.7K: Monthly Decline Insights
Bitcoin Prices Fall for the First Time This Month Since August
Bitcoin moved lower on Tuesday, continuing the downward trend it has been following as year-end trading activity subsides and macroeconomic headwinds persist.
The largest cryptocurrency by market capitalization will log its first monthly decline since August, a major reversal of fortunes from the currency’s recent winning streak. Here is a review of Bitcoin price.
Overview of Bitcoin Price
As of 01:11 ET (06:11 GMT) on Tuesday, Bitcoin was trading at $92,733.4, reflecting a 1.2% decline. The token hit a one-month low of $91,522 on Monday but saw some recovery as buyers stepped in to capitalize on the dip.
However, this rebound did little to offset the broader downtrend observed over the past several sessions. Bitcoin has dropped in five of the last six trading days and had its second consecutive weekly loss last week. December’s Decline: A 4% Loss
Bitcoin was on course to end December with a loss of nearly 4%, its first monthly decline since August. The drop was largely due to macroeconomic factors, with the U.S. Federal Reserve’s unexpectedly hawkish stance being the main culprit.
The Fed’s policy shift during the month forced investors to reassess their positions in speculative assets, including cryptocurrencies, which sent prices lower.
In contrast, November had been a standout month for Bitcoin. The cryptocurrency rallied nearly 40% after Donald Trump secured his victory in the U.S. presidential election.
The rally propelled Bitcoin toward an all-time high of $108,244.9, buoyed by optimism regarding the outcome of the vote. However, the buzz was soon doused with profit-taking and concerns about the Fed’s rate outlook that led to a subsequent sell-off.
The hawkish tone from the Federal Reserve marked a major setback for Bitcoin through December. The central bank announced less than the number of four expected rate cuts anticipated earlier, implying a revised view on monetary policy that subdued sentiment towards risker assets like bitcoin, which flourished during this low-rate year.
The revised rate outlook not only curtailed speculative enthusiasm but also underscored the broader macroeconomic pressures facing cryptocurrencies. Investors, wary of tightening liquidity conditions, moved to reassess their exposure to volatile assets, contributing to Bitcoin’s downturn.
Impact on Crypto Stocks
The decline in Bitcoin prices also reverberated across the broader cryptocurrency market, affecting crypto-related stocks.
MicroStrategy Incorporated (NASDAQ:MSTR): Shares dropped by 8.2%.
Coin base Global Inc (NASDAQ:COIN): Down 3.2%.
Riot Platforms (NASDAQ:RIOT): Fell 4.5%.
Marathon Digital Holdings Inc (NASDAQ:MARA): Down 6.2%.
The weakness in these stocks showed how crypto-linked equities react to Bitcoin price action. When Bitcoin was struggling, investor confidence in companies most closely tied to the crypto market began to weaken, and across the board, the stocks declined.
Overall Cryptocurrency Market Trends
The larger cryptocurrency space remained bearish as most of the altcoins slid. A persistent “risk-off” mode due to increased uncertainty in the macroeconomic sector meant investors sought safer havens from speculative assets.
Ethereum
Closed at $3,357.48, which represents a fall of 2.1% for the week and is slated to lose about 10% during December while recording a rally of 47% in November.
XRP
Recorded a slide of 2.6% and closed at $2.0299.
Solana (SOL): Down 1.8%.
Polygon (MATIC): Fell 4%.
Cardano (ADA): Lost 2.9%.
Dogecoin (DOGE): Among meme tokens, it fell 2.7%.
Performance wise, Ethereum is the second biggest cryptocurrency by market capitalization. From a stellar rally in November, the token went on to experience severe selling in December, indicating a broader trend.
Other significant altcoins and meme tokens such as Dogecoin also caught this wave, underlining the risk-averse sentiment dominating the crypto space.
- First Monthly Loss Since August: Bitcoin’s losses in December have been the first since August, with most of its recent gains eroded by macroeconomic headwinds.
- Macroeconomic Headwinds: The Federal Reserve has adopted a hawkish stance, and expectations for tighter monetary policy have weighed heavily on speculative assets.
- Crypto Equities Under Pressure: Bitcoin’s fall has been felt across crypto-related equities, which have largely tracked the token’s slide.
- Altcoin Weakness: The broader cryptocurrency market, including Ethereum, XRP, and Solana, has also struggled amid subdued demand for speculative investments.
Bitcoin and Cryptocurrency Outlook
The decline in Bitcoin and the wider cryptocurrency market suggests that the sector is facing a set of challenges while navigating an environment of tightening monetary policy and increasing macroeconomic uncertainty.
Although the crypto market has been resilient at times, it faces considerable challenges at present, especially with investors being more risk-averse than they have been on riskier assets.
Of course, the introduction of dip buyers during Monday’s trading session already hints that despite the price depression, there must be some deeper demands for Bitcoin around lower price areas.
This bodes well short-term, of course, pending the macro situation, including broader market sentiment about the Federal Reserve’s monetary policies.
As the year comes to an end, market participants will watch these closely and any potential catalysts that may reignite bullish momentum in the cryptocurrency market.
