Dec 26 2024: Bitcoin traded in a narrow range on Thursday, holding steady at $98,124.6 by 01:35 ET (06:35 GMT), after gaining nearly 5% over the previous two sessions. Investor sentiment remained cautious due to macroeconomic concerns following the U.S. Federal Reserve’s hawkish stance.
Bitcoin Struggles for Direction
After two consecutive days of gains, Bitcoin failed to maintain upward momentum. The cryptocurrency has faced pressure since dropping below the key $100,000 mark last week, triggered by the Fed signaling a slower pace for future rate cuts.
Last week, Bitcoin experienced its first weekly decline since early November, following a post-election rally that had pushed prices to a record high of $108,244.9. Profit-taking and macroeconomic concerns, including the Fed’s outlook for fewer interest rate cuts in 2025, contributed to the decline.
Fed’s Impact on Speculative Assets
The Federal Reserve’s recent decision to cut rates by 25 basis points while projecting only two rate cuts for next year has prompted a reassessment of speculative assets like Bitcoin. This shift has tempered investor enthusiasm and weighed on cryptocurrency prices.
Russia Embraces Bitcoin for Foreign Trade
Russia has started using Bitcoin and other cryptocurrencies for international payments to counter Western sanctions, Finance Minister Anton Siluanov announced on Wednesday. Legislative changes this year legalized cryptocurrency use in foreign trade and introduced regulations for cryptocurrency mining.
Amid challenges in trading with partners like China and Turkey due to heightened scrutiny from Western regulators, Russia is leveraging its position as a leading Bitcoin miner to mitigate economic restrictions.
Altcoins Struggle Amid Cautious Sentiment
Most major cryptocurrencies declined on Thursday as demand for speculative assets remained subdued:
- Ether (ETH): Fell 1.3% to $3,443.05. Despite gains in recent sessions, Ether has yet to recover fully from last week’s losses.
- XRP: Dropped 2% to $2.2462.
- Solana (SOL): Declined 2.2%.
- Polygon (MATIC): Slid 4.6%.
- Cardano (ADA): Lost 3.3%.
- Dogecoin (DOGE): Fell 2%.
Cryptocurrencies face a challenging outlook as market participants weigh the impact of monetary policy shifts on speculative assets.
