Investing.com — Bitcoin fell on Wednesday after a three-day winning streak and a new all-time high as profit-taking took place ahead of the Federal Reserve's interest rate decision.
The stock fell 2.4% to $103,688.0 by 01:13 ET (6:13 p.m. Japan time) after breaking the $108,000 level the previous day.
The largest cryptocurrency briefly reached an all-time high of $108,244 on Tuesday. This was announced after President-elect Donald Trump raised the possibility of a strategic Bitcoin reserve in an interview with CNBC last week.
Bitcoin is supported by strategic reserves and whale trading prospects
Trump has pledged to introduce crypto-friendly regulations if elected, and recent nominees to key cabinet and regulatory roles have shown strong pro-crypto tendencies.
However, analysts still have doubts about the feasibility of establishing a Bitcoin reserve, especially the mechanics of its formation.
Analysts believe the strategic reserve is unlikely given President Trump's unwavering belief in the dollar's primacy.
Additionally, recent data shows that large Bitcoin holders, known as whales, have a significant influence on the cryptocurrency's price movements.
According to on-chain analyst Ali Martinez, the Bitcoin whale has collected 70,000 Bitcoins by Tuesday of this week.
Analysts believe that increased demand from whales is outpacing the available supply, fueling the continued rise in Bitcoin prices.
A total of only 900 Bitcoins can be mined per 48 hours, far from meeting the substantial demand from Bitcoin whales.
There is therefore growing concern that if this trend continues, a significant supply shortage could be imminent.
Cryptocurrency prices today: Most altcoins fall ahead of Fed interest rate decision, Cardano rises
Other cryptocurrencies followed Bitcoin's lead as traders remained cautious due to the ongoing Fed meeting. Investors also made some gains in altcoins, which have seen significant gains in recent trading.
The world's second-largest cryptocurrency fell 4.7% to $3,839.41, widening its decline. The world's third-largest cryptocurrency fell 0.3% to $2.51.
Values edged lower, falling 6.3%, but rose more than 2%. Meme tokens fell 0.8%.
The Fed is widely expected to do so on Wednesday. But the focus is on the central bank's long-term interest rate outlook, especially in the face of low inflation and economic resilience.
The central bank may signal that it will slow its pace of rate cuts in 2025, suggesting that interest rates could remain high for an extended period of time. This scenario could pose challenges for cryptocurrency prices.
