Under the dual pressure of turmoil in the global bond market and uncertain economic prospects, the cryptocurrency market has recently experienced a significant pullback. After Bitcoin lost the $100,000 mark, it continued its downward trend today (9th), at one point breaking below $93,000. The gains since the beginning of the year have almost completely evaporated, causing concern among many investors. However, analysts believe this pullback is merely a 'brief respite', and expect Bitcoin to continue its upward trend by the end of the month.
CoinGecko market data shows that Bitcoin hit a low of $92,938.86 early this morning, down over 9% from Tuesday's high of $102,290. Although Bitcoin has slightly recovered to $94,662 at the time of writing, it is still down 2.3% in the past 24 hours.
In fact, several analysts had warned earlier that due to the overall economic situation still being full of uncertainties, the cryptocurrency market could face a difficult start in January. The main influencing factors include: the Federal Reserve's (Fed) hawkish stance, rising long-term U.S. Treasury yields, persistent inflationary pressures, and the potential risk of a government shutdown in the U.S.
Furthermore, the U.S. released a series of strong economic data on Tuesday, further triggering a market sell-off, as investors lowered their expectations for interest rate cuts this year. Although Fed Governor Christopher J. Waller later expressed support for further rate cuts to alleviate the inflationary impacts that Trump's tariff policies might bring, the market's outlook on interest rates did not change significantly.
In addition, the minutes from today's Fed meeting also indicated that most officials believe the risks of rising inflation have increased, while also expressing concerns about the potential impacts of Trump's new policies.
Can Bitcoin rebound in the short term?
Today's decline has brought Bitcoin's price back to the lower edge of the consolidation range since the end of last November. However, well-known cross-asset trader Bob Loukas believes Bitcoin is likely to rebound from its lows in the short term, but may continue to oscillate within the range, and does not rule out the possibility of further declines until the pressure is fully absorbed, after which there would be an opportunity to reach new highs. He pointed out in a post:
This does not mean that the market will be entirely bearish, but we may need more time to adapt to price levels above $100,000 in order to truly break through this region.
Regarding the future trend of Bitcoin, QCP Capital believes that the U.S. non-farm payroll data to be released this Friday, as well as the Fed's interest rate decision meeting at the end of the month, will act as key catalysts influencing Bitcoin's trends. Analysts further stated:
The current pullback is just a temporary respite. Trump's inauguration on January 20 will bring optimism to the market, and Bitcoin is expected to start a new wave of upward movement as a result.
"Bitcoin continues to fall 2%, with almost all gains at the beginning of the year erased! Has the bull market ended or is it just a temporary correction? Experts say this" - this article was first published on (Blockcast).
