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BitcoinSistemi 2025-01-01 09:06:07

Why Has The Rally Momentum In Bitcoin Price Lost Its Momentum? Analysts Answer

Bitcoin has shown resilience by holding above $95,000 despite a decline in global stock indices. This comes as markets assess the outcome of the December 18 Federal Open Market Committee (FOMC) meeting, where Fed Chair Jerome Powell signaled a slower pace of quantitative easing through 2025. However, the largest cryptocurrency by market cap is not immune to broader market pressures. On a weekly basis, Bitcoin has been down along with major stock indexes, with a two-week negative return of 11%, according to K33 Head of Research Vetle Lunde. Ethereum (ETH) has fared worse, falling 15% in the same period, pushing the ETH/BTC ratio to 0.036. K33 Research highlighted Bitcoin’s strong correlation with global equity markets, particularly the Nasdaq, in a report published today. BTC’s 30-day correlation with the Nasdaq has risen above 0.50, the first time such a correlation has occurred since late September. Related News: Onchain Data Reveals: This Cryptocurrency Whale Made $49 Million in Profits on One Altcoin Today, Now Buys Another Altcoin The December 18 FOMC meeting was described as a significant turning point for risk assets, including Bitcoin. During the meeting, the Fed revised its 2025 rate cut estimates from four to two. While rate cuts generally boost markets, the reduced number of projected cuts dampened optimism for risk assets. In addition, Powell’s comments during the press conference hinted at potential inflationary pressures from a possible Trump presidency, a departure from the Fed’s message in November. “While the Fed has cut interest rates by 100 basis points since September, the 10-year Treasury note has risen by the same amount, indicating the market expects an inflationary impulse,” Lunde said. Bitcoin’s momentum was further disrupted by significant exchange-traded fund (ETF) outflows and reduced buying activity from major companies like MicroStrategy. Since mid-December, the digital asset has struggled to recapture its previous uptrend, finding support at $91,000, a recent low on Nov. 26. Bitcoin’s weak performance reflects broader market sentiment, with the S&P 500 and Nasdaq each posting their third 1% decline in eight sessions amid uncertainty surrounding global trade in 2025. Trading volumes on major crypto exchanges also declined, with the seven-day average daily spot volume falling to $3.4 billion, the lowest level since Nov. 5, according to K33 Research. Lunde attributed the slowdown to typical holiday seasonality, exacerbated by reduced activity on ETFs and the Chicago Mercantile Exchange (CME). “MicroStrategy’s softening Bitcoin purchases also contributed to lower trading volumes,” he added. *This is not investment advice. Continue Reading: Why Has The Rally Momentum In Bitcoin Price Lost Its Momentum? Analysts Answer

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