On Monday, Bitcoin fell below the $116,000 mark, showing a significant pullback compared to last week's historical high. There are two main reasons: first, expectations of potential easing by the Federal Reserve have cooled, and second, rising geopolitical risks have dampened investors' risk appetite.

As of 1:58 AM Eastern Time (5:58 AM Greenwich Mean Time), Bitcoin's latest trading price is approximately $115,664, down 2%. Other major cryptocurrencies haven't fared much better, with Ethereum retreating from near its historical high and altcoins following suit.

Diminishing prospects of Federal Reserve rate cuts

Last week's release of the U.S. Producer Price Index (PPI) and import price data exceeded expectations, leading the market to abandon hopes of a significant rate cut by the Federal Reserve in September. The FedWatch tool from the Chicago Mercantile Exchange now indicates that the market only anticipates a 0.25 basis point cut, down from previous expectations of up to 0.5 basis points. In simple terms, the expected rate cut is weaker than previously thought.

Escalating geopolitical risks

In addition to economic factors, political news has also unsettled the market. Last week, Trump failed to reach an agreement on Ukraine during his summit in Alaska with Putin; he supports a comprehensive peace agreement but aligns more closely with Moscow's stance, which is interpreted as potentially enhancing Putin's influence.

Later today, Trump will meet with Ukrainian President Zelensky and key European leaders, and the uncertainty surrounding the negotiation outcomes is keeping the market cautious. This means that in the short term, Bitcoin and other speculative assets may experience increased volatility.

Rising risk aversion

Due to concerns over political and economic risks, many investors are turning to safe-haven assets, resulting in a rise in gold prices on Monday. Risk assets like Bitcoin are temporarily under pressure, and market sentiment remains cautious. #加密市场回调 #美联储取消创新活动监管计划