- Bitcoin and other cryptocurrencies declined on Monday, pulling back from 20-month highs, but prices still remain near the peak of the recent rally.
- Bitcoin’s price dropped 8% in the last 24 hours, falling to $40,272, down from around $44,500 levels on Friday.
- Ether, the second-largest crypto, also dipped below $2,250, dropping nearly 4%. Smaller tokens or altcoins were also weak, with Cardano down 5% and Polygon down 5%.
Bitcoin and altcoins faced significant selling pressure on Monday, leading to a decline: What events could boost prices this week?
Bitcoin Price Starts the Week in Red
Bitcoin and other cryptocurrencies declined on Monday, pulling back from 20-month highs, but prices still remain near the peak of the recent rally. In the coming days, catalysts such as the Federal Reserve announcement could play a role, potentially influencing sentiment.
Bitcoin’s price dropped 8% in the last 24 hours, falling to $40,272, down from around $44,500 levels on Friday; this marked the highest point for the largest digital asset since early April 2022, before it entered a harsh and prolonged bear market, signaling a departure from months of stagnant trading. Bitcoin’s surge of roughly two-thirds in two months put an end to the prolonged period of dormancy, sparking calls for a new crypto bull market.
Optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF) has been one of several factors supporting gains in crypto prices, and it is expected to kick off a new wave of investor interest. Along with an increasingly favorable macroeconomic environment, expectations that the Fed will cut interest rates several times next year, and historically tight token supply, this has contributed to the gains in crypto prices.
Like the Dow Jones Industrial Average and the S&P 500, Bitcoin has benefited from macro tailwinds, as weakening inflation and slowing growth support the likelihood of a significant drop in interest rates from historic highs since the beginning of next year. Therefore, this week’s Federal Reserve monetary policy meeting on Tuesday and Wednesday holds significant importance.
Moves regarding the Fed’s interest rates will be critical
While the markets do not expect a rate cut this month, Federal Reserve Chair Jerome Powell’s press conference will be closely scrutinized for signals on when interest rates might be cut; currently, traders expect the first cut no earlier than March. Any soft comments from Powell or indications that interest rates could be cut earlier without other major catalysts have the potential to restart the crypto rally, especially news related to a spot Bitcoin ETF.
Ether, the second-largest crypto, dropped nearly 4%, falling below $2,250. Smaller tokens or altcoins were also weak, with Cardano down 5% and Polygon down 5%. Memecoins also saw declines, with Dogecoin falling 2% and Shiba Inu losing 4%.
