Key Points
- Bitcoin’s price fell below $96,000 on Friday, its lowest level in over six months.
- The sell-off is linked to fading expectations of a December interest rate cut by the U.S. Federal Reserve.
- Bitcoin is on track for its third straight weekly loss and is down nearly 24% from its October peak.
- Markets now price in only a 50% chance of a December rate cut, down from 90% earlier this month.
Bitcoin fell below $96,000 on Friday for the first time in over six months. The drop came as a broader sell-off in risky assets accelerated, driven by fading hopes that the U.S. Federal Reserve will cut interest rates in December.
The world’s largest cryptocurrency was last trading down 2.8% at $96,009, after hitting a low of $95,885.33 earlier in the day—its lowest point since May 7.
Bitcoin is now on track for its third consecutive weekly decline, down nearly 24% from its peak in early October.
Risky assets, including cryptocurrencies, have been under pressure lately. The main reason is that expectations for a Fed rate cut next month have been shrinking. A growing number of Fed policymakers have indicated they are hesitant to ease monetary policy further, spooking investors.
The market now sees only about a 50% chance of a rate cut in December. That’s a big drop from the roughly 90% chance that was priced in earlier this month and the over 60% chance from earlier this week. When the Fed keeps interest rates higher, it makes safer investments like bonds more attractive, leading some investors to pull money out of riskier assets like crypto.
Ether, the second-largest cryptocurrency, also fell 1.5% to $3,133.76. The entire crypto market seems to be feeling the pressure as investors adjust to the new reality of potentially higher-for-longer interest rates.
