The entire cryptocurrency market was painted red. Several assets, including Bitcoin (BTC), recorded a major fall over the past 24 hours. The world’s largest cryptocurrency recently hit an all-time high of $108,268.45. But BTC was trading 6.63% below this peak during press time. Sadly, the asset dipped below the coveted $100,000 mark and was trading at a low of $98,792. But what is the reason behind this notable correction?
Also Read: Amazon Stock Rises as AMZN Plans $10B AI Investment
Bitcoin’s Current State
Source: CoinMarketCap
At the time of writing, Bitcoin was trading at $100,997.17. This is after the asset witnessed a nearly 3% decrease in price over the past 24 hours. The king coin recorded a bullish month as the asset went from being priced at a low of $91,000 all the way to its all-time high of $108,268.45.
Along with its price, the market cap of the king coin also dipped. Yet, Bitcoin continues to remain the world’s largest cryptocurrency, with a market value of $2 trillion. Despite this, the trading volume of BTC was up by 26% and is at a high of $97 billion.
Also Read: Microsoft: Why MSFT Is Bound for $500 All-Time High in 2025
Why Is The Market Down?
The latest drop was linked to changes in the US government. Most BTC traders are reducing their risk in advance of the US Federal Reserve’s major interest rate announcement. They lowered the federal funds rate to the 4.25% to 4.50% range on Wednesday by cutting interest rates by 25 basis points. Meanwhile, the Fed increased its projections for PCE inflation by the end of 2025 from 2.1% to 2.5%, suggesting that inflation would rise in the coming year. Commenting about this and its impact on the Bitcoin market, prominent analyst Ali Martinez said,
“It wasn’t today’s 25 bps cut that made markets freak out—it was the realization that inflation might stick around longer, and the Fed’s not quite ready to take its foot off the gas. Sentiment is shifting, and 2025 suddenly looks a lot less rosy. For now, keep calm, don’t panic sell, and remember: markets hate uncertainty, but they also thrive on it when the dust settles. Let’s see where this goes from here.”
Also Read: Cardano Up 77% in 2024 Amid Drop: What to Expect From ADA in January
