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Bitcoin extended its slide on Tuesday, falling 1.2% to $92,733.4 by 01:11 ET (06:11 GMT). The cryptocurrency hit a monthly low of $91,522 on Monday before recovering slightly as dip buyers stepped in.
Despite the brief recovery, Bitcoin has dropped in five of the past six sessions and is poised for its first monthly decline since August, down nearly 4% in December.
Key Factors Driving Bitcoin’s Decline
- Impact of Federal Reserve Policy
- December’s losses are linked to the Federal Reserve’s hawkish stance, signaling only two rate cuts for 2025, compared to previous expectations of four.
- This shift has tempered enthusiasm for speculative assets, including Bitcoin, prompting profit-taking after November’s 40% rally triggered by Donald Trump’s presidential victory.
- Macroeconomic Pressures
- Bitcoin’s year-end slide also reflects broader economic uncertainty, with investors recalibrating portfolios amid macro headwinds and lower trading volumes.
Crypto Stocks and Altcoins Follow Bitcoin’s Lead
Crypto Stocks
- MicroStrategy (NASDAQ: MSTR): Fell 8.2%
- Coinbase (NASDAQ: COIN): Dropped 3.2%
- Riot Platforms (NASDAQ: RIOT): Declined 4.5%
- Marathon Digital Holdings (NASDAQ: MARA): Lost 6.2%
Altcoins
- Ether (ETH): Fell 2.1% to $3,357.48, marking a nearly 10% monthly drop after surging 47% in November.
- XRP: Declined 2.6% to $2.0299.
- Solana (SOL): Down 1.8%.
- Polygon (MATIC): Dropped 4%.
- Cardano (ADA): Fell 2.9%.
- Dogecoin (DOGE): Lost 2.7%.
Market Outlook
Bitcoin remains under pressure as the Federal Reserve’s cautious rate policy and year-end liquidity constraints weigh on speculative demand. With Bitcoin’s monthly fall of 4%, broader market sentiment has turned risk-averse, impacting altcoins and crypto-related equities alike.
Analysts are closely watching the $91,000 support level, as a break below could signal further downside risk into the New Year.
