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Wall Street experienced a significant decline on December 19, 2024, with the Dow Jones Industrial Average dropping 1,123.03 points, or 2.6%, marking its longest losing streak since 1974. The Nasdaq Composite and S&P 500 also fell sharply by 3.6% and 3%, respectively, as the Federal Reserve's cautious outlook for rate cuts in 2025 spooked investors. All sectors closed in the red, with consumer discretionary, real estate, and technology stocks hit hardest.
BlackRock's recent video has reignited discussions about Bitcoin's fixed supply, questioning whether its 21 million cap could be altered. While some argue that changing the cap could undermine Bitcoin's credibility, others suggest it might benefit liquidity. Achieving such a change would require a hard fork and significant consensus within the decentralized network, a challenging prospect given the historical resistance to altering Bitcoin's core principles.
Bitcoin's price saw a modest recovery, circling $102,000 after a dip to $98,695, influenced by the Federal Reserve's cautious stance on interest rate cuts. While some traders remain optimistic about a potential recovery, others warn of a larger pullback in January, emphasizing the importance of holding above the $100,000 mark. The market remains volatile, with significant liquidations contributing to the choppy price action.
Dogecoin and Shiba Inu prices have dropped over 5% in the last 24 hours, influenced by Fed Chair Jerome Powell's bearish speech despite a 25 basis point rate cut. Powell's hawkish stance and comments on Bitcoin's status contributed to investor skepticism, leading to further declines in these meme coins, which are correlated with Bitcoin's performance. Analyst Kevin Capital noted a negative short-term outlook for Dogecoin but remains optimistic about a potential recovery as market reactions stabilize.
Micron's stock plummeted over 11% after it reported strong earnings but lowered its outlook, particularly citing weak demand for NAND memory chips. The Federal Reserve's interest rate cuts are impacting homebuilders like Lennar, which reported earnings below expectations due to affordability issues. Meanwhile, the S&P 500 Short Range Oscillator indicates the market is oversold, and speculative sectors are under scrutiny as the Dow faces its worst losing streak since 1974.
El Salvador is reforming its Bitcoin strategy to secure a $1.4 billion loan from the IMF, making Bitcoin acceptance by merchants voluntary and limiting public sector involvement in cryptocurrency. Despite these changes, the government remains committed to purchasing one Bitcoin daily, reflecting President Bukele's belief in its long-term potential. As of mid-December, the country's Bitcoin holdings were valued at over $632 million, with significant investments aimed at improving financial access for its population.
Solana's price has dropped to around $210 following a Federal Reserve rate cut, raising concerns about a potential dip below the critical $200 mark. The broader crypto market is experiencing significant sell-offs, with many altcoins facing notable corrections. Despite bearish pressure, there are indications that strong fundamentals and whale activity could present recovery opportunities for investors.
The crypto market faced a significant downturn following the Federal Reserve's recent meeting, where a 25-basis-point rate cut was announced alongside a reduction in expected cuts for 2025, leading to a drop in Bitcoin's price below $100,000. Despite the immediate pullback, experts like Matt Hougan maintain a positive long-term outlook for crypto, citing ongoing institutional adoption and favorable technical indicators. The Fed's cautious stance is seen as a strategic move to manage market expectations rather than a definitive forecast.
Dogecoin is showing signs of a bullish reversal, with analysts highlighting key support at $0.385 and resistance at $0.42. Despite a recent 6.06% correction, increasing investor interest and favorable macroeconomic conditions suggest potential for new highs, possibly reaching $1 by early 2025. The memecoin's holder count has surged to 6.68 million, reflecting its growing community support.
The Federal Reserve's future interest rate decisions will be driven by economic data, as highlighted in a UBS report. Key indicators, particularly the personal consumption expenditures (PCE) price index and jobs data, will significantly influence the central bank's policy direction. Despite a slower pace of rate cuts anticipated, the overall trend towards easing remains clear, providing clarity for investors in a resilient economic environment.
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