Bitcoin Faces Setback After Strong Start: Struggles to Maintain Momentum Amid Market Concerns

Bitcoin had a promising start to the new year, briefly surpassing the $100,000 mark, but the original cryptocurrency stumbled on Thursday, hitting its lowest point of 2025 so far. On Thursday, Bitcoin dropped as much as 2.8%, reaching $91,785—significantly down from its recent high of $102,733 just two days earlier. This dip is roughly 15% below its all-time high of $108,315, set in mid-December 2024.

The downturn comes amidst a wave of withdrawals from Bitcoin exchange-traded funds (ETFs), with a net outflow of $583 million reported on Wednesday. This marks the second-largest outflow since the ETFs were introduced a year ago. While the success of these ETFs, coupled with President-elect Donald Trump’s strong support for the digital assets industry, had propelled Bitcoin to new heights in 2024, the momentum has stalled as 2025 begins.

The latest US economic data, released on Tuesday, further dampened hopes for imminent Federal Reserve rate cuts, adding pressure to riskier assets like Bitcoin. As a result, some investors have sought downside protection, with increased demand for put options—indicating that traders are bracing for more volatility and potential corrections.

Peter Chung, Head of Research at Presto Research, noted that the Federal Reserve’s hawkish stance is keeping Bitcoin’s price fluctuating within the $91,000 to $102,000 range. He suggested that a breakout in either direction will likely occur once the market completes its recalibration and uncertainty subsides.

Chung also pointed to the upcoming inauguration of President Trump on January 20, suggesting that the market may begin to see clearer signals as his first 100 days in office unfold. However, with US stock market trading halted on Thursday due to the funeral of former President Jimmy Carter, the lack of trading activity could further reduce market liquidity and exacerbate volatility.

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