This news has raised concerns about persistent inflation, which tends to pressure growth-oriented risk assets like cryptocurrencies. Historically, rising Treasury yields have had an inverse relationship with risk assets such as Bitcoin.\u00a0<\/p>\n
On Monday, Bitcoin had traded above $102,000 and is widely anticipated to double this year, contingent on clearer regulations that could bolster digital asset prices. However, uncertainty surrounding the Federal Reserve’s (Fed) interest rate cuts poses potential challenges for Bitcoin’s price trajectory.\u00a0<\/p>\n
In December, the Fed indicated that while it was cutting rates for a third time, the pace of future cuts might be slower than investors had hoped. Rate cuts typically support Bitcoin prices, whereas hikes tend to exert downward pressure.<\/p>\n
Analysts further attribute the recent dip not only to rising yields but also to increasing correlations between Bitcoin and traditional equities, particularly the Nasdaq.\u00a0<\/p>\n
Bob Wallden, head of trading at digital-assets firm Abra, noted that the ISM data triggered a selloff in equities that spilled over into the crypto market.\u00a0<\/p>\n
Wallden suggests that this decline was compounded by profit-taking and stop-loss triggers for traders who had gone long on Bitcoin above the $100,000 mark.<\/p>\n
Adding to the market’s volatility are renewed headlines surrounding President-elect Donald Trump\u2019s shifting stance on tariff discussions, which have further fueled cautious sentiment in the Bitcoin market.\u00a0<\/p>\n
Investors Cash In As 2024 Highs Fade<\/h2>\n
Bitcoin’s record-breaking rally in 2024 began to lose momentum in late December, as investors capitalized on their profits. Optimism surrounding a pro-crypto administration under Trump had previously driven Bitcoin to an all-time high of $108,000 in December.\u00a0<\/p>\n