The cryptocurrency market experienced a significant jolt as bitcoin falls sharply, plummeting to nearly $90,000 per bitcoin two days back. As of today, 1 BTC equals 96,517.71 USD (−742.03 (0.76%)). This decline wiped out approximately $500 billion in value from the $3.2 trillion crypto market. The drop coincided with broader stock market sell-offs after the Federal Reserve warned that inflation remains persistent.
Bitcoin fell 10% over the past 24 hours and was matched by greater drops in other cryptocurrencies like Ethereum, Solana, and dogecoin, dropping between 15% to 25%. This immediate downturn spooked the investors, and a large number of them have reviewed and reassessed their position during uncertain economic signals.
Bitcoin falls sharply, experts comment on the decline
This week, the most significant statement came from Fed Chair Jerome Powell, in which he stated that cuts in interest rates scheduled for 2025 will decline to just two compared with the previous estimate of four. The market continued feeling the pressure and dampening hopes for quicker monetary easing because bitcoin fell sharply.
But bitcoin surprised everyone and rebounded to approach $100,000 after inflation data turned out better than expected. The PCE index came in at a modest 2.4% for November, less than what economists had anticipated. That brought about a $300 billion recovery in the crypto market, with the likes of Ethereum and Ripple’s XRP regaining ground.
Amid the volatility, lead investors are optimistic. For instance, Ark Investment Management founder Cathie Wood stood by her bullish forecast after predicting that bitcoin could shoot up to $1 million by 2030. Wood pointed out that her favorite cryptocurrency is scarcer than gold, as it holds a fixed supply.
“[Bitcoin] is becoming even more scarce than gold,” Wood said. “The difference between gold and bitcoin is, when the gold price goes up, as it has, production goes up, the rate of increase in the supply goes up—that can not happen with bitcoin.”
Experts believe that the journey ahead might be bumpy. Both bitcoin and ethereum are likely to continue volatile trading, as the market approaches year-end. Such factors like holiday trading behavior and even the political event of Donald Trump’s inauguration in January 2025 may keep changing market trends.
James Toledano, chief operating officer at Unity Wallet, said in emailed comments:
“In terms of what is coming over the holiday period, the first rule of Bitcoin is that it is always volatile in the same way water is always wet,”
“It’s behavior is always mixed and there is zero discernible pattern at the end of the year and going into the next. Sometimes the price rises in the new year and at other times it falls. So, historically, we can say that bitcoin exhibits typically mixed behavior over Christmas and New Year,” Toledano added
While there is uncertainty, traders remain cautiously optimistic, with many positioning themselves for long-term gains. As bitcoin falls sharply, it shows the cryptocurrency’s inherent volatility and the complex interplay of macroeconomic factors shaping its future.
Also, see: What we know about the driver who caused Christmas market attack in Germany?