Bitcoin suffered a sharp decline earlier this week, losing the psychological $100,000 mark after just regaining it. The price fell more than 5% to $96,525, influenced by stronger economic data from the United States and rising interest rates. Bitcoin is now hovering around $95,000 as investors analyze the situation.
Economic figures create pressure
The decline was caused by a better-than-expected report from the Institute for Supply Management (ISM) on US service providers. The report showed that prices paid by companies reached their highest level since early 2023, while the number of vacancies also increased more than expected. This led to rising government bond yields, with the 10-year bond reaching its highest level since 2007.
The impact of these figures spilled over into both the stock and crypto markets, with Bitcoin experiencing profit-taking and automatic sell orders. According to Bob Wallden of Abra, a digital asset trading firm, the increasing correlation between Bitcoin and the Nasdaq is a key factor: “The sell-off in equities spilled over into crypto, amplified by profit-taking at levels above $100,000.”
Trump’s policies remain uncertain
The market is also affected by uncertainty surrounding the incoming administration of President Donald Trump. While there is hope that his pro-crypto stance will prove beneficial, investors remain cautious due to his unpredictable stances on trade rates and economic reforms. Trump has previously announced plans to build a national Bitcoin reserve, but it is still unclear how concrete this promise will be.
Great interest in Bitcoin ETFs
Despite the price drop, institutional interest in Bitcoin remains strong. Early this week, nearly $1 billion in net inflows flowed into U.S. Bitcoin exchange-traded funds (ETFs), the largest inflows in months. This shows that investors are still confident in Bitcoin’s long-term prospects despite the recent correction.
Looking to 2025
Bitcoin had a record year in 2024, rising to an all-time high of $108,315. However, analysts are divided on the prospects for 2025. While optimists point to possible regulatory reforms under Trump, skeptics fear the rally is not sustainable. A recent survey shows that 39% of respondents see Bitcoin as one of the most likely “losers” of the coming year.
The question remains whether Bitcoin can regain its position above $100,000 in the short term, or whether investors should prepare for further volatility and possible corrections.
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Source: https://newsbit.nl/bitcoin-duikt-onder-100-000-na-economische-data-en-rentezorgen/
