Last week, the cryptocurrency market was severely tripped up by Federal Reserve Chairman Jerome Powell. In an unusual statement, the official was significantly hostile to the possibility of Bitcoin becoming a US strategic reserve. His words had an inevitable impact on the performance of the crypto world.
During the last week ending this Friday, things did not improve despite an attempt at recovery that ended in rejection. On Christmas Eve, the BTC price reacted to a considerable return from investors and approached $100K. However, that border once again proved to be very resilient.
This Thursday, the token suffered a sharp pullback, with previous gains being undone in a matter of hours. This performance caused the broader crypto market to enter a significant pullback phase. Over the past week, the crypto world is exhibiting a +3.5% performance, which is somewhat offset by the 95% rise of the CEX sector.
If it weren't for the latter, the crypto market's performance would clearly be in the red. According to Artemis data , the best performing token sector (excluding CEX) was staking services with +11.8%. The worst was real-world assets with -12.6%.
The performance of key sectors in the crypto world
What makes the biggest difference in the crypto world this week is the performance of key sectors. For example, DeFi was in the red with 3.9%, while AI tokens and memecoins, the usual toppers, showed red numbers. In that sense, the former lost 2.5% and the latter fell 0.5%.
Meanwhile, the top cryptocurrencies by market cap, Bitcoin (BTC) and Ethereum (ETH), fell 1.5% and 2.3% respectively. As can be seen, the mood was particularly bearish for the combined tokens from all sectors of the cryptocurrency universe.
Despite the poor momentum of the digital currency market, the bullish outlook for 2024 remains bullish. If Donald Trump's campaign promises are fulfilled, the current crash will most likely be considered a minor slip. A major rally is expected to start in virtually all major currencies in January after Trump takes office.
As recently reported, President Trump is expected to approve between one and three executive orders related to cryptocurrencies on his first day in office. This could be the starting signal for Bitcoin and token sectors like those mentioned above to return to double digits in the black.
In the immediate term, however, currencies are likely to continue to fall, which some investors may view as a cheap buying opportunity.