The Bitcoin price (BTC) fell to $87,000 on Sunday, under pressure from rising political tensions in the United States. The likelihood of a partial government shutdown is growing as investors also prepare for the Federal Reserve’s first interest rate decision this year. The XRP price is also having a hard time and is down 4.4 percent today.
Bitcoin price loses grip in waiting market
Bitcoin’s (BTC) decline is part of a broader downturn in the crypto market. Ethereum (ETH) fell towards $2,840, while Solana, XRP and Cardano suffered losses of three to five percent.
A total of $224 million worth of long positions were liquidated in 24 hours, including 68 million on BTC futures and 45 million on ETH contracts, CoinGlass data shows.
US shutdown looms
An important cause of the falling prices is the growing political uncertainty in the United States. The chance of a partial government shutdown at the end of January is increasing rapidly.
Senate Majority Leader Chuck Schumer indicated his party will hold up a major spending package if Homeland Security funding is not cut. This threatens a new impasse in Congress.
Historically, such a shutdown often causes selling pressure on Bitcoin (BTC), followed by a recovery once calm returns. On the prediction platform Polymarket, the chance of a shutdown is currently estimated at 76 percent.
Trump threatens tariffs again
There is more bad news. Donald Trump scared investors on Saturday with a stark warning: if Canada signs a trade deal with China, 100 percent import duties will follow on all Canadian goods.
The energy and automotive industries in North America could be particularly affected by this. Because the statements came during the weekend, when stock markets were closed, analysts expect a sharp reaction on the financial markets on Monday.
Fed decision and tech figures could determine new direction
This week, investors are also looking at two other important events: the Federal Reserve’s interest rate decision and quarterly figures from major technology companies such as Microsoft, Meta, Tesla and Apple. The Fed is expected to leave interest rates unchanged, but Chairman Jerome Powell’s words in particular could determine market sentiment.
Bitcoin is increasingly reacting as a risky investment and could therefore be sensitive to statements about artificial intelligence, market expectations and inflation. The outcome of the interest rate decision and the performance of the so-called “Magnificent 7” could therefore cause new volatility on the crypto market.
Source: https://newsbit.nl/bitcoin-en-xrp-crashen-hard-dit-is-waarom-beleggers-nu-in-paniek-raken/
