Bitcoin has dropped for the fourth consecutive day, closing at $94,159.4 amid diminishing momentum from a post-election rally following Donald Trump’s victory. The Federal Reserve’s recent hawkish approach to interest rates contributed to reassessments in speculative investments, resulting in Bitcoin’s decline. The broader impact was felt across cryptocurrency-related stocks, which also showed negative performance, although several altcoins displayed modest recoveries.

On Tuesday, Bitcoin experienced its fourth consecutive decline, mirroring the loss of momentum from a rally spurred by Donald Trump’s presidential election victory. By 00:22 ET (05:22 GMT), Bitcoin had dropped 2% to $94,159.4, having earlier dipped below the key $93,000 threshold. Following its inability to maintain the $100,000 mark last week, Bitcoin has seen price reductions for six out of the past seven days, primarily influenced by the Federal Reserve’s recent hawkish stance regarding interest rates.

The recent surge had allowed Bitcoin to reach a peak of $108,244.9. However, this high was quickly followed by a notable price correction as investors engaged in profit-taking amid rising macroeconomic concerns following the Fed’s outlook on interest rates. Although the central bank reduced rates by 25 basis points, they indicated a more cautious approach for the upcoming year, forecasting only two rate cuts instead of the previously expected four. This prompted a revaluation of speculative investments, including Bitcoin, leading to the observed price drop.

Consequently, Bitcoin’s declining trajectory has negatively impacted related stocks. On Monday, companies like MicroStrategy Incorporated saw a nearly 9% decrease in their shares, while Coinbase Global Inc experienced a 4% decline. In addition, Riot Platforms closed lower. Pressure on MicroStrategy intensified following their announcement of a stock sale to fund the purchase of over 5,000 Bitcoins. The primary Bitcoin mining entity, Marathon Digital Holdings, also reported a 3.6% drop in stock value.

Despite Bitcoin’s struggles, several altcoins showed modest recoveries. Ethereum, the second-largest cryptocurrency, was up 3.2% at $3,431.48 after experiencing consecutive declines. XRP, ranked third, rose by 3.1% to $2.2627. Other cryptos such as Solana and Polygon saw gains as well, reflecting a slight recovery in the market, yet overall demand remained subdued due to investor caution stemming from the Fed’s recent announcements.

Bitcoin, the leading cryptocurrency, has been subject to significant price fluctuations influenced by macroeconomic factors, particularly policies enacted by the Federal Reserve. Following the presidential election, Bitcoin experienced a notable rally, fueled by sentiment surrounding economic stability. However, recent remarks from Fed officials regarding interest rates have instigated a retraction in speculative asset prices, leading to changes in investor behavior. Understanding these dynamics is crucial for analyzing current market trends in the cryptocurrency sector.

In conclusion, Bitcoin’s recent decline is attributed to the fading post-election rally sparked by Donald Trump’s victory, compounded by a shift in the Federal Reserve’s monetary policy outlook. After reaching an all-time high, Bitcoin’s price corrections highlight the volatility of speculative assets in response to macroeconomic indicators. Furthermore, the fallout has also affected cryptocurrency-related stocks, demonstrating the interconnected nature of the digital asset market. Despite this downturn, a slight recovery among certain altcoins indicates that investor sentiment may eventually stabilize.

Original Source: www.investing.com

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