Bitcoin again failed to hold on to $100 thousand due to expectations of Fed rates

Bitcoin declined slightly on Friday as the recent rally after reaching key levels began to lose momentum, and traders remained cautious ahead of the Federal Reserve's decision expected next week. Writes UNN with reference to Investing.

Yesterday, the world's largest cryptocurrency rose sharply after President-elect Donald Trump reaffirmed his intention to make the United States the world leader in the crypto industry. However, this growth proved to be short-lived, as Trump did not propose any specific policy initiatives.

By 00:30 EDT (05:30 GMT), bitcoin was down 0.7% at $99,961.4. The markets were focused on the Fed's decision on the interest rate, where it is expected to be cut by 25 basis points.

However, the Fed's long-term prospects remain uncertain, especially after November's producer inflation data came in above forecasts, while consumer inflation remained stable. This strengthened the dollar, putting pressure on risky assets, including cryptocurrencies.

Traders are awaiting the Fed's forecasts and preparing for a slowdown in rate cuts in 2025. High rates reduce the attractiveness of speculative assets such as bitcoin.

Despite this, the crypto market showed positive signals: spot exchange-traded funds tracking bitcoin and ether showed a steady inflow of funds in early December. This is due to optimism about more favorable regulation under the new administration.

Meanwhile, most of the major altcoins have reduced their profits. Ether fell by 0.3% to $3,916.31, XRP dropped by 3.6% to $2.3458, and Solana, Cardano, and Polygon lost between 2% and 7%. Among meme tokens, Dogecoin fell by 2.7%.

Recall

On Wednesday , bitcoin remained relatively stable after a recent decline as traders refrained from taking significant action ahead of the publication of key US inflation data that could influence future interest rate decisions.