The price of Bitcoin fell below $93,000 Monday, hitting its lowest price in nearly a month—since November 26—as a so-called Santa Claus rally failed to materialize and the crypto charts looked as red as the holiday icon’s suit.

Less than a week ago, the leading cryptocurrency traded hands above $108,000, rising to a record price as the holiday season approached. But in a Scrooge-like twist, a hawkish Federal Reserve dented the asset’s price by voicing a more cautious approach to rate cuts next year.

Lower interest rates tend to be favorable for Bitcoin and other “risk assets” like equities. As borrowing becomes cheaper, investors typically seek risker assets that could produce better returns than the payouts that come with holding safer ones like cash and U.S. Treasuries.

When the Fed lowered its benchmark interest rate by 25 basis points to a target range of 4.25% to 4.5% last week, policymakers signaled there would be fewer rate cuts next year than investors had previously anticipated. Among Fed officials, a majority foresaw two rate cuts next year, down from four rate cuts projected by the U.S. central bank’s officials in September.

Inflation has slowed drastically since peaking at 9.1% year-over-year in June 2022, per the U.S. Bureau of Labor Statistics’ Consumer Price Index. Clocking in at a 2.7% increase in the 12 months through November, the latest report, however, showed inflation still running above the Fed’s 2% target.

Since the Fed began cutting interest rates in September, a 100 basis-point reduction in the U.S. central bank’s benchmark rate has given policymakers more wiggle room, Powell explained.

“With today’s action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” Powell said. “We can therefore be more cautious as we consider further adjustments to our policy rate.”

As market participants have mulled the Fed’s hawkish tone, Bitcoin’s price has fallen 13% over the past week, while Ethereum and Solana’s have respectively tumbled 18% and 15% to $3,300 and $186, over the same period, according to CoinGecko data.

Among altcoins, XRP’s price has held up slightly better, notching a 12% drop to $2.18 over the same span. As meme coins have been hit hardest by the recent market route, Dogecoin’s price has dropped 22% to $0.31 over the past week.

Typically, a Santa Claus rally can emerge during the last five trading days of the year, followed by the first two trading days of the New Year, per MarketWatch. And while the stock market will be closed on Christmas Day, crypto will be trading around the clock, as always.

While the crypto market will likely see less trading activity through the rest of the year, that doesn’t mean investors should hang their hats up on Santa’s prospects, according to BRN analyst Valentin Fournier.

“With institutional activity expected to decline and retail trading volumes anticipated to remain subdued during the final two weeks of the year, volatility should continue to decrease,” he wrote in a Monday note. “While the ongoing negative momentum could lead to small losses, a sharp rebound remains possible.”

Edited by Andrew Hayward