The broader cryptocurrency market has been grappling with volatility, and Bitcoin (BTC) is at the center of the storm. After a significant rally following Donald Trump’s victory in the 2024 U.S. election, Bitcoin recently faced a sharp decline, dipping below the $100K mark. This downturn comes just days after the U.S. Federal Reserve’s decision to cut interest rates and comments from Fed Chair Jerome Powell, raising concerns over future market trends.
Bitcoin Faces Setback Amid Macro Concerns
Bitcoin’s recent rally had sparked optimism among investors, particularly following the pro-crypto stance anticipated under the Trump administration. Institutional interest in BTC surged, driven by robust inflows into U.S. spot Bitcoin ETFs. However, Bitcoin’s momentum has faltered in recent days, primarily due to broader financial market turbulence.
BTC’s price dropped below $100,000, signaling that a wave of investors may be cashing out amid concerns over macroeconomic factors. The Federal Reserve’s recent rate cut of 25 basis points aligned with market expectations, offering short-term optimism. However, Powell’s comments regarding a potential slowdown in future rate cuts weighed heavily on sentiment. Investors were further alarmed by the Fed’s revised policy outlook, which indicated fewer rate cuts in 2025 than initially anticipated, heightening market uncertainty and contributing to selling pressure.
Will Bitcoin Recover?
Despite the short-term pullback, market experts remain largely bullish on Bitcoin’s long-term prospects. As of today, BTC was trading around $101,738, marking a nearly 3% drop. Its trading volume surged by 22%, reflecting heightened market activity amidst the volatility. Bitcoin’s price has fluctuated significantly, touching lows of $98,792 and highs of $105,302 in the past 24 hours, and reaching an all-time high (ATH) of $108,268 on December 17.
Several experts continue to predict a Bitcoin recovery. Analyst Ali Martinez forecasts that BTC may dip to $99K but believes the bearish trend will end once Bitcoin surpasses the $105,400 level. Other notable voices, such as Peter Brandt, have set their sights on $125K for Bitcoin, while Bitwise’s CIO predicts a meteoric rise to $500K if the U.S. establishes a Bitcoin Strategic Reserve.
While short-term pullbacks remain a risk, as highlighted by Arthur Hayes, who predicts potential corrections in January, experts maintain a confident outlook for Bitcoin’s long-term growth. The ongoing discussions around a U.S. Bitcoin reserve and other global initiatives further strengthen market sentiment, keeping Bitcoin in the spotlight as it navigates through volatile times.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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