Market sentiment changes abruptly, Bitcoin drops 5% in a day

On December 20, Bitcoin's price drop has widened to nearly 15% from this week's historical high, as the hawkish signals from the Federal Reserve prompted traders to sell Bitcoin. Bitcoin fell 5% in a day to $92,600, while earlier this week, Bitcoin had reached a historical high of just above $108,000.

Smaller tokens like Ethereum and Dogecoin are under even more pressure, while stock markets in Asia and Europe also experienced declines. Data shows that on Thursday, a batch of U.S. Bitcoin ETFs ended a 15-day streak of inflows, recording an outflow of $680 million, highlighting the shift in market sentiment.

QCP Capital noted that positions have become "overly bullish," making digital assets susceptible to changes in the Federal Reserve's tone. XTB senior market analyst Hani Abuagla stated that the interplay between monetary policy, institutional adoption, and political situations suggests that by 2025, Bitcoin will remain sensitive to the macro environment and specific catalysts.