Bitcoin Price Drops Against the US Dollar
Bitcoin's price fell below $95,000 on Friday for the first time in over six months, marking a sharp decline of more than 4% to $95,000, amid a sell-off in high-risk assets.
The world's largest cryptocurrency by market capitalization is on track for its third consecutive week in negative territory, having fallen by about 24% from its peak in early October.
The Main Reason: Shifting Expectations Regarding US Interest Rates
This sharp decline is primarily driven by fading expectations of an interest rate cut by the US Federal Reserve in December. The probability of such a cut has dropped in market estimates from around 90% at the beginning of the month to 60% at the beginning of the week, and now stands at just 50%, triggering widespread selling of risky assets.
Impact on Other Assets
The pressure wasn't limited to Bitcoin alone. This general climate of risk aversion was reflected in other cryptocurrencies, with the price of Ethereum – the second-largest digital currency – falling by 3% to $3,100.
An Uncertain Future
The Federal Reserve's cautious stance and its signals about pausing monetary easing appear to have redirected investors' attention toward safe-haven assets at the expense of cryptocurrencies. This puts Bitcoin and its counterparts in direct confrontation with central bank policies and volatile market expectations.
