Yesterday, the U.S. central bank decided to cut interest rates. While Bitcoin initially showed a promising rise, the floor collapsed later in the evening. The price ultimately gave up 5 percent, and several altcoins suffered even greater losses.
Rate Cut Sends BTC on a Rollercoaster #
The Bitcoin price experienced intense fluctuations yesterday evening, especially after 8:00 PM when the decision to cut rates by 25 basis points (0.25 percentage point) was announced. The same decision was made at the previous two rate meetings.
This time, it was also announced that the bank will slowly begin expanding its balance sheet again. Starting December 12, $40 billion in short-term government bonds will be purchased. This was a positive surprise and seemed to be a key reason for the subsequent price surge. At 9:15 PM, a peak was set just above $94,000. But in no time, the jump was erased.
Overnight, Bitcoin continued to slide, dropping to $89,400. From the low, that represents a loss of just over 5 percent.
The good news: with this dip, Bitcoin has finally closed the so-called CME gap. On the U.S. futures exchange, a small gap had formed over the weekend because the price opened higher on Sunday than it closed on Friday. Over the past six months, such gaps have been filled quickly, and this time was no exception.
Additionally, Bitcoin is once again touching its downward trend line. This is the moment when buyers must step in if they want to continue the upward trend of recent weeks.
$BTC filling the weekend CME gap as it retests the broken linear downtrend. Looking for mean reversion towards $100K ASAP after the first death cross on CME futures since 2022. [pic.twitter.com/xsz2hNMLl9]
At the time of writing, the BTC price on crypto exchange OKX is $90,371. On the Dutch crypto exchange Bitvavo, the BTC price in euros is €77,413. Compared to 24 hours ago, BTC is down 2.41%.
Altcoins Share the Pain #
For a change, we are seeing worse results in other cryptocurrencies. Even Ethereum, which has been having a very strong period, is down 3.27%.
Solana, Dogecoin, and Cardano are taking a beating with losses of 5.66%, 5.42%, and 6.80% respectively. Ripple, better known as XRP, has lost 3.57% of its value.