Bitcoin continued its decline on Friday, driven by low year-end trading volumes, with investors remaining cautious about the future of cryptocurrencies following the Federal Reserve’s hawkish stance last week.
At 01:30 ET (06:30 GMT), Bitcoin had dropped 2.1%, settling at $96,403.7.
On Thursday, Bitcoin’s pullback was attributed to misleading chart data from TradingView. The cryptocurrency briefly dipped toward $95,000 after users on social media noticed an anomaly in TradingView’s Bitcoin dominance chart, which erroneously showed Bitcoin’s market share dropping to 0%. Although the error was corrected, it triggered a wave of sudden trading activity that pushed prices lower.
CoinGlass data revealed that approximately $33 million in Bitcoin long positions were liquidated within a span of four hours.
Bitcoin is now on track for its second consecutive weekly decline. The rally triggered by Donald Trump’s presidential election win had driven prices to an all-time high of $108,244.9 last week, but the momentum waned following the Fed’s meeting. Profit-taking, compounded by macroeconomic pressures due to the Fed’s rate outlook, contributed to the drop.
The central bank reduced rates by 25 basis points but signaled only two rate cuts for the upcoming year, down from previous expectations of four cuts. This shift prompted investors to reevaluate their positions in speculative assets like Bitcoin, fueling the ongoing price decline.
Other cryptocurrencies also followed Bitcoin’s downward trend, heading for weekly losses. Demand for speculative assets remained subdued, as the Fed’s hawkish stance raised liquidity concerns across the market.Ether, the second-largest cryptocurrency, dropped 1.5% to $3,379.39, after experiencing a nearly 5% decline the previous day.
XRP, the third-largest crypto, fell 2.8% to $2.2187, and was on track for a weekly loss of nearly 4%.
Solana dropped 1.7%, while Polygon lost 1%. Cardano saw a sharper decline, falling over 8% to $0.8965. Among meme tokens, Dogecoin decreased by 2.6%.