The world of cryptocurrencies has been very active in the last 24 hours. This means prices have been moving up and down a lot, a situation called volatility.
Bitcoin’s Rollercoaster Ride
Bitcoin (BTC), the most well-known cryptocurrency, tried to reach a price of $95,000. However, it couldn’t hold that price and fell back down to about $90,000.
Many other digital currencies, known as altcoins (any cryptocurrency other than Bitcoin), are currently losing a lot of value. For example, Cardano (ADA) has dropped by more than 10%.
Why Bitcoin Moved So Much
The Federal Reserve (often called the Fed), which is the central bank of the United States, made an important announcement. They decided to cut their main interest rate by 0.25%. This means it becomes cheaper to borrow money. This was the third rate cut this year.
Even though many people expected this change, and it was likely already ‘priced in’ (meaning the market had already considered this news in current prices), it still caused Bitcoin’s price to swing even more.
Right after the Fed’s announcement, Bitcoin’s price quickly shot up past $94,000. But then, people who expect prices to fall, sometimes called ‘bears’ in financial markets, stepped in. They pushed Bitcoin’s price down to $89,600. Currently, Bitcoin is trading around $90,200.
Many users on social media platform X (formerly Twitter) pointed out that Bitcoin’s price often reacts this way after meetings of the FOMC (Federal Open Market Committee), which is part of the Fed. Historically, these dips have sometimes been followed by big price increases. Lowering interest rates is generally seen as ‘bullish’ (a good sign that could lead to higher prices) for the cryptocurrency market. However, we’ll have to wait and see if this latest rate cut helps Bitcoin’s price grow over the long run.
Bitcoin’s Market Share
After all these price changes, the total value of all Bitcoins in circulation, known as its market capitalization, decreased to about $1.8 trillion. However, Bitcoin’s ‘dominance’ (its share of the total cryptocurrency market compared to altcoins) actually grew to about 57.1%.
Other Digital Currencies Are Struggling
Most altcoins followed Bitcoin’s lead. They initially jumped after the Fed’s news but then fell back even harder than Bitcoin did.
Cardano (ADA) is one of the worst performers among the top 100 digital currencies today (December 11). It lost 10% of its value and is now priced around $0.42. Other altcoins like Pump.fun (PUMP), Ethena (ENA), Avalanche (AVAX), Polkadot (DOT), Internet Computer (ICP), and Dogecoin (DOGE) also dropped significantly, losing between 6% and 8%.
But it’s not all bad news! Some altcoins are actually doing well today. Provenance Blockchain (HASH) saw its price jump by 8%, and MemeCore (M) is up by 4%.
Overall, the total value of all cryptocurrencies in the market decreased by 2.2% to $3.17 trillion.