(Bloomberg) — Bitcoin and the broader cryptocurrency market have made a shaky begin to the 12 months, hurt by speculation that the Federal Reserve’s window for further interest-rate cuts is closing.
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The digital asset briefly slid below $90,000 on Monday — a drop of virtually 5% compared with the beginning of 2025 — before a rebound that left it broadly flat for January. Smaller tokens resembling Ether are nursing losses for the month to this point.
Investors are coalescing across the prospect of a protracted Fed rate pause as a result of US economic resilience and the danger of inflationary tariff and immigration policies from President-elect Donald Trump, who will likely be sworn in next week.
Treasury yields have surged in consequence, cooling a few of the ardor for crypto sparked by Trump’s vow to make the US the worldwide capital of digital assets by creating friendly regulations and undoing a Biden administration crackdown.
Traders also dumped stocks because the selloff in Treasuries rippled across global markets. The S&P 500 index, for example, has erased much of the gain triggered by Trump’s election victory on Nov. 5.
‘Material Pressure’
Higher bond yields and dollar strength have “put material pressure on risk assets,” said Richard Galvin, co-founder of hedge fund DACM. At the identical time, “Trump may make crypto-specific executive orders a few of his first actions post-inauguration,” he said.
Bitcoin, which reached a record high of $108,316 last month, modified hands at about $94,800 as of 6 a.m. on Tuesday in London. The token’s advance since Election Day has moderated to roughly 40%.
Many within the crypto community remain optimistic about a permanent boom under Trump. Bitcoin accumulator MicroStrategy Inc. just reported its tenth consecutive weekly purchase of the cryptoasset, taking its stockpile to around $41 billion.
For now, the most important digital asset stays in a “corrective phase,” in accordance with Fairlead Strategies LLC technical analyst Katie Stockton. Chart trends point to the potential of a test of “downside” support at $87,500, she said.
Over the past 4 trading days, investors pulled about $1.6 billion net from US spot-Bitcoin exchange-traded funds, data compiled by Bloomberg show.
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