Bitcoin's price fell below the $60,000 mark amid fading optimism about Federal Reserve (Fed) rate cuts. The world's largest cryptocurrency has experienced significant losses in the past 24 hours.
Current Market Situation
Bitcoin's current price has marked a 12% decline over the past three months, placing it 20% below its all-time high of nearly $74,000 set in March. The reasons for the widespread losses are not immediately clear, but one possible explanation is traders cashing out profits after a brief rally.
Reaction to Jerome Powell's Speech
Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Economic Symposium last Friday initially led to a rise in Bitcoin. Powell hinted that the central bank is almost certain to start cutting interest rates in September. Historically, lower interest rates have benefited cryptocurrencies because they offer better returns compared to safer investments like government bonds. Bitcoin’s price initially rose after Powell’s comments but has since erased all those gains.
Expert Analysis
FxPro analyst Alex Kuptsikevich noted that the recent drop in Bitcoin’s price can also be attributed to a lack of trading volume, a common occurrence in late August when markets tend to slow down. “The market appears to have been largely dragged down by auto-stop orders during light trading hours,” Kuptsikevich wrote in a morning research note. “Such sales often push out leveraged investors but can also attract long-term buyers looking to buy at lower prices.”
Bitcoin's price dropped below $60,000 as optimism about Fed rate cuts decreased and trading volumes dwindled in late August. Experts suggest that such situations can push short-term investors to sell off assets while attracting long-term buyers.
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