Bitcoin is experiencing its first weekly decline since Donald Trump’s recent election victory, as a cautious outlook from the Federal Reserve has dampened the optimism that had surged in the cryptocurrency market. As of Sunday afternoon, Bitcoin’s value had dropped over 7%, marking its largest decline since September. The digital currency was trading around $95,000, down approximately $13,000 from its record high reached just a week prior
The broader cryptocurrency market also felt the impact, with a composite index of various digital assets, including Ether and Dogecoin, witnessing a sharper decline of about 10% during the same period. This downturn comes on the heels of the Federal Reserve’s third consecutive interest rate cut, which was accompanied by a more cautious approach to monetary easing aimed at controlling inflation. This shift has sent ripples through global financial markets, causing a sell-off in stocks and tempering the speculative enthusiasm that had been ignited by Trump’s pro-cryptocurrency stance
Market analysts suggest that while the near-term outlook may be choppy due to low liquidity and heightened volatility as the year concludes, there remains a bullish trajectory anticipated for early 2025. David Lawant, head of research at crypto prime broker FalconX, noted that despite current fluctuations, a recovery is expected as market conditions stabilize
Trump’s election has been seen as a catalyst for Bitcoin’s recent surge, with his administration’s favorable regulatory stance towards cryptocurrencies contributing to a significant rally in digital asset prices. Since Trump’s victory on November 5, Bitcoin had previously surged more than 40%, reaching new heights amid expectations of supportive policies for the crypto sector. However, the recent Fed policy adjustments have introduced uncertainty, leading to profit-taking among investors and a subsequent pullback in prices
As Bitcoin navigates this turbulent period, investors are closely monitoring both regulatory developments and macroeconomic indicators that could influence future price movements in the cryptocurrency market.
