Crypto Whirlwind: Trump’s Policies Collide With Fed Stance as Bitcoin Falls to $95K
Bitcoin's price falls to $95K after reaching $100K earlier in December, driven by profit-taking and the clash between Trump’s pro-crypto policies and the Federal Reserve’s stance on interest rates.
Crypto Whirlwind: Trump’s Policies Collide With Fed Stance as Bitcoin Falls to $95K
Bitcoin's price took a hit on Sunday, Dec. 22, 2024, dipping below the $96,000 mark to reach an intraday low of $95,135. This drop follows an impressive surge past $100,000 earlier in the month, highlighting the volatility that continues to define the cryptocurrency market.
Traders Cash In, Bitcoin Tanks to $95K in Sunday Sell-Off
Analysts point to profit-taking as a key factor behind the sell-off, with investors locking in gains from Bitcoin's recent meteoric rise. This comes amid broader economic uncertainty and shifts in market sentiment, partly fueled by President-elect Donald Trump’s pro-crypto stance. Trump's proposals include creating a national bitcoin reserve and appointing crypto-friendly leaders to regulatory positions, signaling potential regulatory shifts in favor of digital assets.
Clash of Policies: Trump’s Vision vs. Fed’s Rate Strategy
The price dip also follows a statement from Federal Reserve Chair Jerome Powell, in which he emphasized that rate cuts would be slower in 2025, a stance that caused further uncertainty in the market. Additionally, Powell reaffirmed that the U.S. central bank is prohibited from holding Bitcoin as a reserve asset, a comment that has had an impact on market sentiment. Since Powell's remarks, Bitcoin has experienced a drop of over 11% from its December 17 peak of $108,364.
Outlook for Bitcoin: Bearish Correction or Continued Growth?
Despite the slump, experts remain optimistic about Bitcoin's future. Some analysts predict the cryptocurrency could climb to $150,000 or even higher by 2025, driven by increasing institutional interest and favorable regulatory policies under Trump’s administration. However, Sunday's price drop triggered significant liquidations across derivatives markets, with over $258 million in liquidations, including $30 million from Bitcoin long positions.
For many, this downturn is seen as a natural correction in a broader upward trend. However, caution remains among investors, as the crypto market is known for its volatile price movements. Time will ultimately reveal whether Bitcoin’s bull run will resume or if further corrections are on the horizon.
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