Bitcoin Drops 4.8% to $97,000 Amid Rising Treasury Yields
Bitcoin (BTC) fell 4.8% to $97,000 after a brief rise above $100,000 earlier in the week. Major crypto stocks like Coinbase and MicroStrategy declined over 7% and 9%, respectively, while mining companies Mara Holdings and Core Scientific dropped around 5%.
Market Influences
- The decline coincided with a spike in the 10-year US Treasury yield following strong ISM data indicating growth in the US services sector.
- Rising yields traditionally negatively impact risk assets, including Bitcoin.
- Uncertainty regarding Federal Reserve interest rate cuts poses challenges for Bitcoin's price trajectory.
- In December, the Fed indicated slower future rate cuts than investors anticipated.
- Recent correlations between Bitcoin and traditional equities have increased, affecting market dynamics.
- Profit-taking by traders contributed to the selloff.
- Political factors, such as President-elect Donald Trump's tariff discussions, added to market volatility.
Investor Sentiment
- Bitcoin's rally in 2024 lost momentum in late December as profit-taking occurred after reaching an all-time high of $108,000.
- Future prospects depend on Trump's cryptocurrency policy, including a potential national Bitcoin stockpile.
- 39% of respondents in a MLIV Pulse survey believe Bitcoin may become a losing investment in 2025.
- Analysts suggest support at $97,000; if this level holds, a rebound is possible, but a drop below could lead to a decline towards $92,000.
