Bitcoin has recorded its first weekly drop in months, falling more than 7% in the last seven days. On Monday morning in Singapore, the cryptocurrency was trading at approximately $94,344, a sharp drop from its all-time high of $108,000 earlier this month.
The broader crypto market was not spared either, with popular tokens like Ethereum and Dogecoin contributing to an overall market decline of 10%. The slowdown reflects growing concerns among investors following the US Federal Reserve’s latest policy actions.
Last week, the Federal Reserve raised interest rates for the third straight time and signaled plans to slow monetary easing in 2025 to rein in inflation. While these actions are aimed at stabilizing the economy, they have added pressure on risk assets like cryptocurrencies, leading to sell-offs and lower market optimism.
Bitcoin’s performance has also been hit by a record outflow from US-based Bitcoin exchange-traded funds (ETFs). Institutional investors appear to be pulling back as market uncertainty grows. Analysts warn that Bitcoin must maintain its $90,000 support level to avoid further declines. “Breaking below this level could trigger a wave of sell-offs,” said Sean McNulty, chief operating officer at Arbelos Markets.
Despite the recent setbacks, some market experts remain optimistic about Bitcoin’s long-term prospects. David Lawant, head of research at FalconX, predicts that Bitcoin could regain momentum in early 2025. However, he warned of potential near-term volatility, particularly with a major options expiry event looming on December 27.
MicroStrategy, a company known for its large Bitcoin holdings, is also under scrutiny. Traders are closely watching whether the company will continue its aggressive buying strategy, which could influence Bitcoin’s price trajectory.
Although Bitcoin is still up almost 37% since Donald Trump’s election victory, the path forward is uncertain. Macroeconomic challenges and investor caution are likely to keep the cryptocurrency market volatile as the year comes to a close.
Also read: Bitcoin Hits $108,000 as Cardano and Litecoin Gain Investor Interest