Bitcoin Struggles as Crypto Rally Loses Momentum: Is a Correction Coming?
Bitcoin (BTC-USD) has experienced a notable decline, reaching its lowest levels since November, dipping to $91,600. This drop follows a significant surge in late 2024, when the cryptocurrency surpassed the $100,000 mark and peaked at over $108,000. The initial rally was driven by optimism surrounding President-elect Donald Trump’s victory, as his pro-crypto stance was seen as a boon for the industry. However, Bitcoin’s recent pullback has raised concerns among investors, particularly in light of economic data that has reignited inflation fears.
Trump’s anticipated crypto-friendly policies, such as the nomination of Paul Atkins to lead the US Securities and Exchange Commission (SEC) and the creation of a “crypto czar” position held by former PayPal CEO David Sacks, had fueled expectations for a more favorable regulatory environment for digital assets. Yet, as the market cools, caution is setting in. Crypto investor Anthony Scaramucci warned that while the shift in Washington may be encouraging, changes may not happen overnight, urging investors not to expect immediate results.
Despite continued enthusiasm among crypto supporters, some are wary of a potential market correction, reminiscent of the 2022 crash. Bitcoin’s recent price retreat reflects broader market trends, with crypto-related stocks like MicroStrategy (MSTR) and Coinbase (COIN) also experiencing declines. MicroStrategy has fallen 12.7% since Monday, while Coinbase has dropped 9.6% during the same period.
With the crypto market facing uncertainty in the short term, both investors and analysts are watching closely to see how regulatory changes and economic conditions will shape the future of Bitcoin and the broader cryptocurrency space.
