As Donald Trump’s inauguration date approaches, Bitcoin and altcoins were expected to gain value in the cryptocurrency market. However, the market moved contrary to expectations and Bitcoin and altcoins suffered serious losses due to increasing macroeconomic concerns.
Bitcoin fell from $102,000 to $96,000, while Dogecoin (DOGE) was the asset with the biggest losses among the top 10 cryptocurrencies in the last 24 hours. Other major altcoins also fell: Solana (SOL) lost 9.4%, Ethereum (ETH) lost 8.5%, and XRP lost 5.7%. DOGE fell 11.9%.
According to analysts, the main reason for the recent decline in Bitcoin and other cryptocurrencies is the general decline in the US markets and the strengthening of the US dollar. However, some experts say that this decline is temporary and the bull market will continue.
zkLink CEO Vince Yang said that the decline is short-term and the market will recover soon. Yang said, “The main reason for the sharp declines experienced by Bitcoin and Ethereum was the stronger-than-expected US employment data, which weakened expectations for further interest rate cuts. However, such declines have occurred before, so this is not unusual for the crypto market. We are still optimistic about the rise. History shows that such pullbacks usually pave the way for larger increases. In addition, factors such as the emergence of a more crypto-friendly administration in the US are important signs that the bull market will continue.”
However, QCP Capital analysts state that January could be a difficult month for cryptocurrency markets. Analysts stated that January could be shaky for the market and declines could continue. According to QCP Capital analysts, a period in which structural risks increase could begin in January.
“January will not be easy, as structural risks come into play. The US Treasury’s debt ceiling is expected to be reinstated, requiring the government to take ‘extraordinary measures’ to finance spending. This could lead to high volatility in the cryptocurrency market as the debate around the issue intensifies,” they warned.
The cryptocurrency market is currently fluctuating due to uncertainties and macroeconomic factors. Although some analysts believe that the market will recover, possible economic developments and structural risks in January may have a decisive impact on the market. Therefore, it will be important for investors to be careful and follow the market developments closely.