Bitcoin experienced a bit of a rebound after initially facing some losses, marking its first weekly drop since Donald Trump’s election win, while a number of smaller cryptocurrencies like Ether and Dogecoin saw gains.
By late afternoon in New York, Bitcoin had slipped 1.2%, hovering around $93,962, following an earlier drop of 2.8% on Monday. Since hitting a record high on December 17, Bitcoin has tumbled about 13%. Meanwhile, a broader cryptocurrency index that includes smaller tokens managed to turn things around, rising over 1%, with Dogecoin itself climbing nearly 4%.
The crypto market has been quite a rollercoaster lately, torn between the hope of a more favorable regulatory climate under Trump’s administration and worries that lingering high inflation might hinder the Federal Reserve’s rate-cut momentum. The market’s bounce on Monday came alongside a notable announcement from Republican Senate Majority Leader John Thune regarding upcoming committee assignments. One highlight was Ohio Republican Bernie Moreno, known for his crypto-friendly stance, joining the Senate Banking Committee.
Bitcoin recently faced its first weekly dip since Trump took office, dropping 7.5% over the week leading up to Sunday. On Wednesday, the Fed made headlines with a third consecutive rate cut but hinted at slowing down next year to keep inflation under control. This hawkish turn sent global stocks reeling and cooled the speculative frenzy in the crypto space incited by Trump’s regulatory promises and support for a national Bitcoin reserve. Sean McNulty from Arbelos Markets noted that last week’s significant withdrawals from US ETFs focused directly on Bitcoin could apply downward pressure on its price short-term.
“We should maintain Bitcoin above the $90,000 mark through the year’s end. However, if it falls below, we might see further sell-offs,” McNulty explained. He mentioned that significant downside hedges were evident in the options market lately, with noticeable interest in puts for January through March at $75,000 to $80,000 strike prices.
David Lawant from FalconX highlighted a probable scenario of unsettled prices in the short term, leading to a “bullish trajectory” in Q1 of 2025, likely due to a low-liquidity environment that could increase volatility as the year closes. Especially with December 27 expected to witness one of the largest options expiries in the history of crypto, the market is poised for potential turbulence.
Meanwhile, MicroStrategy Inc., a leveraged Bitcoin proxy, continued its streak of weekly announcements by disclosing its acquisition of 5,262 Bitcoins between December 16 and December 22 at an average price of about $106,662. Although this is the smallest purchase they’ve made in weeks, it happened as Bitcoin prices soared to over $108,000.
Overall, the market remains dynamic, showing both caution and optimism as it navigates uncertain waters while keeping an eye on past and upcoming regulatory shifts.
