Today, the broader cryptocurrency market continues to be volatile, with Bitcoin's price experiencing significant setbacks. The flagship cryptocurrency recently fell below the $100,000 level due to massive selling pressure in the broader financial markets (not to mention the digital asset space). Notably, this pullback of BTC occurred after the Federal Reserve decided to cut interest rates and Chairman Jerome Powell delivered a speech.
The drop in Bitcoin's price below $100,000 sparked market discussions.
Since Donald Trump won the U.S. election this year, the price of Bitcoin has been on the rise. This sparked market sentiment favoring a regulatory environment conducive to cryptocurrencies under the new president's leadership. Moreover, institutional interest in BTC has also surged, as evidenced by strong inflows into U.S. spot Bitcoin ETFs.
However, despite this, cryptocurrencies faced significant setbacks this week. BTC recently fell below the $100,000 mark, indicating that a large number of investors are frantically selling amid macroeconomic concerns that have triggered overall volatility in the financial markets.
The Federal Reserve announced a 25 basis point rate cut at its latest meeting yesterday, which aligned with market expectations and briefly boosted investor optimism in the short term.
Nonetheless, the latest comments from Federal Reserve Chairman Powell have dampened investor sentiment. Powell hinted in his latest remarks that the Fed might slow down the pace of interest rate cuts before next year, which sparked market discussions.
Meanwhile, the Federal Reserve stated that the central bank has halved the previously expected number of interest rate cuts. Specifically, the central bank may only lower policy rates twice in 2025, down from the previously expected four cuts throughout the year. This has triggered selling pressure in the market, impacting Bitcoin's price.
Will BTC experience a recovery in the future?
The price of Bitcoin dropped nearly 3% today, trading at $101,738, with trading volume rising 22% to $95 billion. In the past 24 hours, this flagship cryptocurrency reached a low of $98,792 and a high of $105,302, reflecting highly volatile market trading conditions. Additionally, it also hit an all-time high of $108,268 on December 17.
However, despite the short-term correction in cryptocurrency prices, experts remain bullish. Many market analysts state that given the bullish market trend, cryptocurrencies are expected to recover in the future. Reports indicate that the U.S. is considering establishing a strategic reserve for Bitcoin, which has boosted market confidence in this asset. Furthermore, other global leaders, including EU politicians, are also targeting similar initiatives.
Considering all these aspects, market sentiment remains strong. At the same time, in a recent analysis, top market expert Ali Martinez predicted that BTC would drop to $99,000. However, he also noted that once BTC surged above $105,400, bearish momentum would begin to dissipate.
Additionally, Peter Brandt recently stated that BTC is expected to reach $125,000 in the future, reflecting his confidence in this flagship cryptocurrency. Meanwhile, Bitwise's CIO indicated that once the U.S. Bitcoin strategic reserve is in place, the price of Bitcoin will reach $500,000.
Nevertheless, experts have repeatedly warned of short-term corrections, like the current situation. As a backdrop, Arthur Hayes mentioned that Bitcoin will continue to face corrections while predicting a potential crash in the cryptocurrency market during Trump's inauguration on January 20. However, despite the bearish forecast, Hayes pointed out that the market will continue to rise.
