Bitcoin’s price took a notable dip on Friday, trading below the $96,000 mark for the first time in over six months. This decline comes amidst a broader market retreat from risky assets, largely driven by diminishing expectations for an interest-rate cut from the Federal Reserve next month.
As of 2:30 p.m. ET, Bitcoin had dropped nearly 4%, falling to $95,721.83, marking its third consecutive weekly decline. The largest cryptocurrency by market capitalization has seen a dramatic fall of nearly 24% since peaking in October, although it still holds a year-to-date increase of approximately 2.7%.
Arthur Azizov, founder and investor at B2 Ventures, noted that the drop below the significant $100,000 threshold confirmed a descending channel that began forming in mid-October, directly after substantial liquidations. “The macroeconomic background is also cautious,” he added, highlighting the uncertainty that has gripped market participants.
Ether, another prominent cryptocurrency, also faced selling pressure, slipping nearly 2% to $3,169.39 on the same day.
The backdrop of this market turmoil is the recent reopening of the federal government, which came after the longest shutdown in history. However, the White House indicated that key economic data from October, including the jobs report and inflation stats, might not be fully released. Kevin Hassett, Director of the National Economic Council, stated that while the labor report would eventually be published, it would lack data on the unemployment rate.
Federal Reserve Chair Jerome Powell has indicated that there is no consensus among officials regarding a potential interest-rate cut in December, despite market speculation suggesting a high probability of such a move. On Friday, the estimated chances of a quarter-point cut during the December 10 meeting fell to 45.9%, a significant drop of 21% from the previous week and nearly 50% since October, according to CME FedWatch.
Azizov cautioned that until the economic outlook becomes clearer, investors are likely to maintain a cautious stance toward assets such as Bitcoin. Tech stocks have also suffered a significant downturn in recent weeks as investor sentiment turned risk-averse, although the tech-heavy Nasdaq experienced a bounce-back on Friday.
Ken Mahoney, CEO of Mahoney Asset Management, suggested there is always a possibility that the current decline in Bitcoin could be a final shakeout before a larger upward move. “Crypto investors really need to be watching like a hawk to see how we continue to react to this critical level,” he emphasized. “Bitcoin is usually better bought on weakness and sold into strength if you are just looking to trade it.”
