Is this the bottom? Experts assess Bitcoin's 13% drop and potential recovery

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Bitcoin (BTC) is experiencing its first seven-day decline in eight weeks, as the Federal Reserve (Fed) sent a strong signal, prompting traders to sell the asset, which has more than doubled in value this year.

The cryptocurrency market began to rise after Donald Trump won the U.S. presidential election on November 5, followed by increased volatility.

Analysts at QCP Capital pointed out that market positioning has become "overly bullish," making digital assets susceptible to fluctuations in the Fed's tone regarding inflation control.

After historic ETF outflows, Bitcoin rebounds to $97,500

The leading cryptocurrency fell 5.3% to $92,149 on Friday, after reaching a historic high slightly above $108,000 earlier this week. Since then, the price of Bitcoin has recovered to the $97,500 mark, down about 5% since Sunday.

Despite the overall good performance of the U.S. stock market, this downturn has also affected smaller cryptocurrencies, including Ethereum (ETH) and Dogecoin (DOGE).

The significant outflow of funds from U.S. exchange-traded funds (ETFs) directly investing in Bitcoin further highlights this shift in sentiment. According to data compiled by Bloomberg, these funds saw a record outflow of $680 million on Thursday, ending 15 consecutive days of inflows.

Federal Reserve Chairman Powell stated on Wednesday that the Fed may slow its easing measures, shifting people's focus to the pace at which traditional financial institutions are adopting cryptocurrencies.

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