Bitcoin Extends Losses After Recent Highs
Bitcoin continued its decline on Monday, retreating further from its peak of over $108,000 reached nearly two weeks ago.
The world’s largest cryptocurrency dropped 1.6% to $93,869.0 by 05:04 ET (10:04 GMT). Despite the pullback, Bitcoin remains up 120% for the year, buoyed by optimism around potential digital currency backing under the incoming Trump administration.
Strong Dollar and Rate Concerns Weigh on Bitcoin
Bitcoin’s recent downturn reflects the waning post-election boost, with the cryptocurrency settling into a range between $92,000 and $100,000, according to Chris Weston, head of research at Pepperstone. Weston warned that a break below $92,000 could trigger further declines toward $81,000.
Traditionally, Bitcoin has moved inversely to the U.S. Dollar Index (DXY), which tracks the dollar against major currencies like the euro. Recent strength in the dollar, fueled by anticipation of economic policies from President-elect Donald Trump, has made traditional assets such as U.S. Treasuries and stocks more attractive compared to cryptocurrencies.
As a result, hopes for a prolonged crypto rally have dimmed, with Bitcoin losing nearly 4% this month. Factors like reduced market liquidity and year-end profit-taking have also curbed momentum, damping the usual December “Santa rally.”
In addition, diminished expectations for further Federal Reserve rate cuts have added pressure on Bitcoin and other digital assets. However, some investors remain optimistic, believing that long-term crypto-friendly policies could support the market even amidst dollar strength.
Altcoins Follow Bitcoin Lower, XRP Leads Declines
Most other cryptocurrencies mirrored Bitcoin’s decline, trading flat or slightly lower, with XRP seeing the sharpest drop among major altcoins.
- Ether (the second-largest cryptocurrency) edged up 0.4% to $3,418.90.
- XRP plunged nearly 5% to $2.079.
- Solana fell 1.8%, while Polygon slid 3.1%.
- Cardano dropped 2.5% to $0.87.
- Among meme coins, Dogecoin declined 1.7%.
The broader crypto market remains under pressure, weighed down by lower liquidity, strong dollar dynamics, and profit-taking as the year ends.
