Bitcoin Price Volatility: Dips Below $85K Amid Fed Rate Concerns

Bitcoin experienced notable price volatility recently, dipping below $85,000, with a low of $84,398 recorded on Thursday, before slightly recovering to $87,769 on Friday according to Cointelegraph. This decline has been attributed to various economic factors, including shifting investor sentiment towards safer assets amid concerns over the Federal Reserve's monetary policy.

Market participants have become increasingly risk-averse, with the odds of a Federal Reserve rate cut diminishing, as indicated by the CME FedWatch Tool, which showed a drop in cut probabilities from 24% to 22% for the upcoming January FOMC meeting.

Additionally, strong demand for U.S. Treasurys and economic weakness in both the U.S. and Japan have further pressured Bitcoin's market performance. According to CoinDesk, Bitcoin's price has struggled to break above the $89,000 ceiling, facing consistent sell pressure during U.S. market hours, highlighting a broader trend of volatility in the cryptocurrency space.

As market participants continue to navigate these economic uncertainties, Bitcoin's role as a hedge against inflation is also being questioned, especially as gold has emerged as the preferred asset for risk-averse investors during this period of economic instability.