What macroeconomic factors, like Federal Reserve rate decisions, can influence Bitcoin’s price movements?
Why is this the correct answer?
The Federal Reserve sets benchmark interest rates to control borrowing costs and liquidity in the financial system. When rates are lowered, more capital tends to flow into risk assets like Bitcoin as investors seek higher returns. Conversely, rate hikes can reduce liquidity, making speculative assets less attractive and often causing downward pressure on Bitcoin prices.
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