Bitcoin prices fell slightly below $100,000 as traders await the Federal Reserve’s rate decision next week. Despite a brief rally driven by favorable comments from President-elect Trump regarding U.S. crypto leadership, the market remains cautious. Recent figures show strong inflows into Bitcoin and Ether ETFs, indicating growing institutional interest. However, most altcoins reflected Bitcoin’s downward trend, suggesting a cautious investor sentiment amid regulatory uncertainties.

On Friday, Bitcoin experienced a slight decline, dipping below the $100,000 mark as market confidence waned ahead of a forthcoming Federal Reserve rate decision. The leading cryptocurrency had surged following remarks from President-elect Donald Trump, which underscored his intention to position the U.S. as a frontrunner in the global cryptocurrency arena. However, this uptrend proved temporary as the market awaited further clarifications on applicable policies. By midnight ET, Bitcoin registered a decline of 0.7%, settling at $99,961.4.

Current focus shifts toward the impending Federal Reserve meeting, where analysts predict a 25 basis point reduction in interest rates. Nonetheless, uncertainty surrounds the Fed’s extended outlook on future rates, fueled by higher-than-expected producer inflation figures juxtaposed against persistent consumer inflation. As anticipation builds, the U.S. dollar strengthened, exerting downward pressure on risk-centric assets, including cryptocurrencies. Investors are preparing for a potentially more gradual easing of monetary policy by 2025, which could hinder the appeal of speculative assets like cryptocurrencies.

Recent data from the cryptocurrency market indicates that exchange-traded funds (ETFs) tracking Bitcoin and Ether have experienced consistent inflows through early December. This trend reflects burgeoning institutional interest in cryptocurrencies, attributed to the perceived regulatory friendliness anticipated under the Trump administration. Notably, Bitcoin ETFs have recorded inflows for eleven consecutive days, with Blackrock’s iShares Bitcoin Trust commanding a significant share. Similarly, spot Ether ETFs have noted fourteen consecutive days of inflows, largely driven by institutions such as Blackrock and Grayscale.

In response to Bitcoin’s retracement, the majority of altcoins also experienced losses, mirroring the leading cryptocurrency’s performance. Despite recent fluctuations, altcoins had previously outperformed Bitcoin as the market embraced the prospect of favorable regulatory conditions enabling wider adoption. Ether witnessed a slight decline of 0.3%, reaching $3,916.31, while XRP fell by 3.6% to $2.3458. Other notable altcoins, including Solana, Cardano, and Polygon, saw declines ranging from 2% to 7%. Meanwhile, meme tokens like Dogecoin observed a 2.7% drop.

The cryptocurrency market has been notably influenced by macroeconomic trends and geopolitical events. With the Federal Reserve poised to announce a rate decision, traders remain vigilant about how these monetary policies may affect risk assets, including cryptocurrencies. Bitcoin, being the leading player in this market, often sets the tone for investor sentiment. President-elect Trump’s statements regarding cryptocurrency regulation have also heightened market expectations, impacting trading behaviors and institutional interest in spot ETFs.

In summary, although Bitcoin experienced a minor retreat below $100,000, inflows into cryptocurrency ETFs indicate a sustained interest among institutional investors. The upcoming Federal Reserve rate decision introduces uncertainties that could affect the appeal of speculative assets. Concurrently, altcoins followed Bitcoin’s trend, reflecting broader market sentiments amid expectations of regulatory changes that could either bolster or challenge the cryptocurrency ecosystem.

Original Source: www.investing.com

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