Bitcoin extended its losses today, briefly dropping below $90,000 as investors dumped growth-oriented assets including cryptocurrencies and technology stocks.
The largest cryptocurrency was last seen trading at $92,567.84, down 2% on the day, according to Coin Metrics. Bitcoin recently dropped to $89,259.00, marking a 9% drop in the past week.
Ethereum fared worse, shedding 7%, while the broader crypto market as measured by leading indexes fell more than 5%. Shares of crypto-related companies also felt the impact, with Coinbase down 4%, MicroStrategy down 3%, and Marathon Digital Holdings and Core Scientific down 4% and 2% respectively.
The cryptocurrency sell-off was triggered last week by a combination of stronger-than-expected U.S. employment data and concerns about President-elect Donald Trump’s proposed tax plans. Those developments pushed up bond yields and boosted the U.S. dollar, putting pressure on bitcoin and other risk assets.
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“The liquidity need is driven by strong year-end US economic numbers, strong stock market gains and other places where money is needed in the short term, as well as currency gains,” said James Davies, co-founder and CEO of Crypto Valley Exchange. “If we want Bitcoin to behave like a currency, we have to accept that there are times when it does, and this is one of those times. The strength of the US dollar puts pressure on everything else, including Bitcoin.”
Investor optimism was high heading into 2025 on hopes of a pro-crypto Congress and administration. However, recent macroeconomic headwinds have overshadowed those expectations, with analysts warning of increased volatility for crypto markets in the first quarter.
Bitcoin is up 120% in 2024 on increased institutional adoption and market enthusiasm, but started the new year on a weaker note, down 3% year to date.
*This is not investment advice.
Continue Reading: Why Did Bitcoin Price Drop Today? Analyst Explains the Main Reason
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Author: NixCoin
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