Bitcoin marked its first weekly decline since Donald Trump’s election victory as the Federal Reserve’s cautious policy outlook moderated optimism about the president-elect’s adoption of the cryptocurrency sector.
The largest digital asset fell 9.5% over the seven-day period to 10 a.m. Monday in London. A broader indicator of the cryptocurrency market, covering smaller tokens such as Ether and meme favorite Dogecoin, suffered a steeper drop of around 12%.
On Wednesday, the Federal Reserve delivered a third straight interest rate cut, while signaling a slower pace of monetary easing. next year to keep inflation under control, sending global stocks into a tailspin. The aggressive turn also curbed speculative spirits unleashed in the cryptocurrency market by Trump’s promise of friendly regulations and his support for a national Bitcoin reserve.
A record outflow from US exchange-traded funds that invested directly in Bitcoin last week will affect prices in the short term, said Sean McNulty, chief operating officer at liquidity provider Arbelos Markets.
“We should hold the $90,000 level for Bitcoin through the end of the year, but if we break below that it could lead to more sell-offs,” McNulty said, adding that last week saw “significant short-covering” in the Bitcoin market. options with great buyers of January, February and March put options with strike prices of US$75,000 to US$80,000dollars.
The original cryptocurrency was trading at around US$96,000, almost US$12,000 below the all-time high reached on December 17.The token is still up approximately 40% since the November 5 presidential election.
Volatile price action in the near term before a “bullish trajectory” through the first quarter of 2025 remains the “most likely scenario,” wrote David Lawant, head of research at leading cryptocurrency broker FalconX, in a note.
Lawant said that “a low liquidity environment can bring more volatility as we enter the final days of the year, especially as On December 27, cryptocurrencies are likely to experience the largest options expiration event in their history”
