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(Bloomberg) — Bitcoin pared earlier losses after capping its first weekly drop since Donald Trump’s election victory, while many smaller chips rose on the day.
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The biggest digital asset was down 1.2 percent at about $93,962 at 4:39 p.m. in New York after falling 2.8 percent earlier on Monday. It’s down about 13% from its last high on Dec. 17. A broader gauge of the crypto market, which includes smaller tokens such as Ether and meme crowd favorite Dogecoin, reversed losses to trade up more than 1%. Dogecoin itself rose almost 4%.
The crypto market has been rocked by optimism about a friendlier regulatory environment under the incoming Trump administration and concerns that stubbornly high inflation will slow the pace of interest rate cuts by the Reserve federal The recovery coincided Monday with Senate Republican Majority Leader John Thune’s announcement of committee assignments for the upcoming Congress, including the selection of Sen.-elect Bernie Moreno, a crypto-friendly Ohio Republican, to the Banking Committee of the chamber.
Bitcoin is coming off its first weekly decline since Trump was elected, falling 7.5% in the seven days through Sunday. The Fed on Wednesday offered a third consecutive interest rate cut as it signaled a slower pace of monetary easing next year to keep inflation under control, sending global stocks tumbling. The hawkish pivot also dampened the speculative spirits unleashed in the crypto market by Trump’s promise of friendly regulations and his support for a national Bitcoin stock. Sean McNulty, chief trading officer at liquidity provider Arbelos Markets, said a record outflow of US exchange-traded funds investing directly in Bitcoin last week will weigh on prices in the short term.
“We should hold the $90,000 level for Bitcoin until the end of the year, but if we break below that, that could trigger more liquidation,” McNulty said, adding that he saw “significant covering in the down” in the options market last week with big buyers for January. February and March set strikes at $75,000 to $80,000.
Short-term choppy price action ahead of an “upward trajectory” in the first quarter of 2025 remains the “most likely scenario,” David Lawant, head of research at cryptocurrency broker FalconX, wrote in a note.
