🚨 Factors Causing Crypto Price Decline: Impact of Fed Policy & Market Sentiment 📉💥
Cryptocurrency prices on December 6, 2024 experienced a significant decline influenced by several key factors that can affect the global market.
1. US Economic Data and Monetary Policy
The Federal Reserve's decision related to interest rates and US monetary policy has a direct impact on the crypto market. According to analysts, uncertainty related to inflation and the Fed's decision not to immediately lower interest rates put pressure on the crypto market. High interest rates tend to reduce liquidity in the market and lead to a decline in the price of risky assets such as crypto.
2. Massive Liquidation and Outflows from Crypto ETFs
Higher interest rate policies and economic uncertainty have triggered massive liquidation of crypto positions by investors. In addition, outflows of funds from Bitcoin and Ethereum ETFs have also worsened the situation, adding selling pressure on crypto prices.
3. Negative Market Sentiment
The global stock market also experienced a decline, causing investors to be more cautious in investing in risky assets. Fears of a global recession and economic pressure from the Fed's policies created great uncertainty, affecting market sentiment and leading to a sell-off in the crypto market.
4. Liquidity and Money Flow Factors
The lack of liquidity in the crypto market was also a factor in the price decline. At the same time, there was a large outflow from a number of crypto exchanges indicating a decline in investor interest. This worsened price movements in the sluggish market.
Overall, the decline in crypto prices on December 6, 2024 was influenced by a combination of US economic policy, liquidity pressure, and negative market sentiment. Investors in the crypto market should be careful and monitor global economic developments, especially the Fed's interest rate policy and upcoming inflation data.
