Bitcoin, the leading cryptocurrency, saw a steep drop in its prices earlier today. The prices dropped below the $100,000 mark, with the lowest price dip being somewhere around $98,000, which is almost 6% lower than the recent high of $105,000 on Sunday. The reason for the decline is said to be due to traders locking in their profits ahead of the Federal Open Market Committee (FOMC) meeting scheduled for January 28-29.
How FOMC Affects Crypto?
The FOMC has a great impact on the crypto world. When the interest rates are increased by the FOMC, it becomes expensive for the investors to borrow money which leads to dropped prices in crypto. The decisions made by the FOMC also affect the inflow and outflow of money in the market and the amount of risk an investor is ready to take.
If the U.S. dollar is made stronger by them, this situation will cause the crypto prices to go down. So, from the observed patterns, this entire meeting creates a sense of fear amongst the investors making them feel a little less confident in the market, and affects the crypto prices in all.
Now, with the meeting nearing, the fear has set in and due to this reason, the investors seem to be making cautious decisions and are liquidating their funds, positioning themselves securely before the FOMC meeting.
Moreover, Deepseek’s latest AI model is acting like a threat to the tech sector. The newly launched innovative, low-cost open source technology. This development has raised questions about tech valuations, indirectly affecting broader market confidence.
Bitcoin & Crypto Market Take a Hit
Despite ive factors such as President Donald Trump’s pro-crypto stance and MicroStrategy’s continued Bitcoin acquisitions, the cryptocurrency market struggled. The global crypto market capitalization saw a notable 8% decline, signaling a broader pullback across digital assets.
At press time, the price of the Bitcoin token stands at $99,113.53 with a dip of 5.6% in the last 24 hours.
With this dip, analysts remain cautious but still optimistic about its long term potential. However, the interplay of the macroeconomic factors and technological innovations keeps the market on edge in the short term, causing heavy fluctuations over the charts.
