Bitcoin’s seven-day decline marks its first since Donald Trump’s election victory, as the Federal Reserve’s cautious policy outlook tempers optimism about crypto sector regulations. The largest digital asset dropped 9.5% through Monday in London, with a wider crypto market gauge also suffering a decline of around 12%.
The Fed delivered a third consecutive interest-rate cut while signaling a slower pace of monetary easing to keep inflation in check, sending global stocks into a tailspin. This move damped speculative spirits unleashed by Trump’s pledge of friendly regulations and his backing for a national Bitcoin stockpile.
A record outflow from US exchange-traded funds investing directly in Bitcoin last week will weigh on prices in the near term. Sean McNulty, director of trading at Arbelos Markets, said that if Bitcoin breaks below $90,000, it could trigger further liquidations and warned of “meaningful downside hedging” seen in the options market.
Despite this, David Lawant, head of research at FalconX, sees a bullish trajectory into 2025. He notes that choppy price action ahead of the year-end is expected, but believes a low-liquidity environment could lead to more volatility.
Traders are monitoring MicroStrategy Inc.’s weekly buys of Bitcoin as it approaches its next price trigger on Monday.
Source: https://finance.yahoo.com/news/bitcoin-approaching-first-weekly-decline-202301116.html