Is this the bottom? Experts assess Bitcoin's 13% drop and potential recovery

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Bitcoin (BTC) is experiencing its first seven-day decline in eight weeks, as the Federal Reserve (Fed) sent a hawkish signal, prompting traders to sell the asset, which has more than doubled in value this year. 

The cryptocurrency market began to rise following Donald Trump's victory in the U.S. presidential election on November 5, and volatility has since increased. 

Analysts at QCP Capital noted that market positioning has become "overly bullish," making digital assets susceptible to volatility stemming from the Fed's tone on inflation control. 

After historic ETF outflows, Bitcoin rebounds to $97,500

The leading cryptocurrency fell 5.3% to $92,149 on Friday, after hitting a historic high of just above $108,000 earlier in the week. Since then, the price of Bitcoin has rebounded to the $97,500 mark, down about 5% since Sunday. 

Although the U.S. stock market has performed well overall, this downturn has also affected smaller cryptocurrencies, including Ethereum (ETH) and Dogecoin (DOGE).

Significant outflows from U.S. exchange-traded funds (ETFs) that invest directly in Bitcoin further highlight this shift in sentiment. According to data compiled by Bloomberg, these funds recorded outflows of $680 million on Thursday, ending a streak of 15 consecutive days of inflows.

Federal Reserve Chairman Powell said on Wednesday that the Fed may slow its easing measures, shifting focus to the pace at which traditional financial institutions adopt cryptocurrencies.

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