Bitcoin's Decline Amid Economic and Policy Uncertainty

Bitcoin's Recent Downturn

Bitcoin experienced a third consecutive day of decline as traders cashed in profits from a prior surge to record highs. The cryptocurrency's inability to break the $100,000 mark left investors disappointed. Concerns about U.S. economic policies and potential trade tensions further dampened market sentiment. By early Wednesday, Bitcoin had dropped 1.6% to $93,131.5.

Economic Indicators and Policy Expectations

This week's market focus is on key U.S. economic indicators, which are pivotal in shaping interest rate forecasts. The PCE price index, a preferred inflation measure by the Federal Reserve, was set to be released, influencing the central bank's interest rate decisions. The Fed's November meeting minutes revealed a division among policymakers regarding the pace of rate cuts, with a tendency towards gradual easing. Additionally, third-quarter GDP data was expected to provide further insights into the economic landscape, particularly inflation, affecting rate cut motivations.

Trump's Crypto Policy and Market Reactions

Anticipation surrounds President-elect Donald Trump's crypto policy, as he aims to position the U.S. as a global crypto leader. However, specifics on his approach remain unclear until he assumes office on January 20. His Treasury and Commerce Secretary picks, Scott Bessent and Howard Lutnick, have shown support for cryptocurrencies, providing some market optimism.

Impact on Altcoins

Bitcoin's weakness also affected major altcoins. Ethereum fell 0.4% to $3,419.99, while XRP, Solana, Cardano, and Polygon saw declines between 0.9% and 5%, with XRP experiencing the most significant drop. Meme tokens like Dogecoin also faced a 3% decrease. The broader cryptocurrency market mirrored Bitcoin's downturn, retracting gains from November's rally.