Bitcoin has erased much of its recent post-election rally, falling into the red a week before Donald Trump takes office again.
The leading cryptocurrency briefly dipped below $91,000 on Monday morning, before regaining some ground. Bitcoin is down about 3% at $91,400.96.
That’s a major reversal from a record high of more than $106,000 last month, fueled by expectations of a third and final interest rate cut by the Federal Reserve in 2024 and a continued ride on the Trump-led market rally.
With Trump’s inauguration a week away, bitcoin extended its slide after a series of losses, falling below $100,000 again last week. The popular digital asset appears to have been stymied by renewed concerns about inflation and the Federal Reserve’s plans to slow the pace of interest rate cuts.
Last week’s jobs report showed the labor market remains strong, with job creation beating Wall Street expectations in December. Consumer price index (CPI) numbers are due out on Wednesday.
Other cryptocurrencies also took a hit at the start of the week. Ethereum’s native token, Ether, the second-largest cryptocurrency by volume, fell more than 5% to $3,083.01 each; Solana fell about 6%; Elon Musk’s favorite digital asset, Dogecoin, fell about 5%; and Cardano dropped about 8%.
Investors are hoping that Trump will spur adoption and legalization of digital assets. During his campaign, he called for a national strategic reserve of bitcoin, declared that all bitcoin should be mined in the United States, and linked his name to multiple crypto projects.
The president-elect has tapped cryptocurrency advocate Paul Atkins to head the Securities and Exchange Commission after Gary Gensler’s departure — a move welcomed by the crypto industry.
Cryptocurrency Big Drop: Bitcoin, Ethereum Under Pressure
The dominant cryptocurrency, Bitcoin (BTC), has recorded a significant 3.56% decline over the past 24 hours, currently trading at $91,572. This drop puts Bitcoin at a critical juncture, just above an important support level at $90,866. If the price breaks this threshold, analysts expect Bitcoin to see a significant slide towards the $88,000 mark.
Recent analysis suggests that Bitcoin’s daily chart is showing a bearish trend, which could signal further corrections. Currently trading near $91,572, a break of $90,866 could unleash the accumulated selling pressure, pushing Bitcoin towards lower support areas. Traders should remain vigilant, and monitor the market for any developments that could signal a reversal or continuation of this downward trajectory.
Ethereum Follows Suit, Faces Price Weakness
Ethereum (ETH) has also succumbed to the general bearish sentiment, falling by around 5.88% since yesterday’s prices. Currently trading around $3,084, ETH is closely approaching a crucial threshold at $3,028. A close below this level could trigger a shift in market sentiment, potentially leading to further declines to the $2,900-$3,000 range.
As Ethereum struggles with its position, the focus will be on upcoming market behavior, especially if the price maintains stability above major moving averages. The market’s reaction to a close near the $3,028 level will be pivotal in determining whether a correction or recovery will occur. Analysts are advising traders to carefully review their positions as Ethereum approaches this critical area.
XRP is not exempt from the current market slump, having seen a 5.1% decline, currently trading at $2,392. Although the coin has yet to fall near its designated support levels, a decisive move lower could see it target the $2.20-2.30 area, especially if it closes the day’s trading near its lows.
Bitcoin ETFs Have a Remarkable Year After
It has officially been over a year since the approval and launch of US-based Bitcoin (BTC) spot exchange-traded funds (ETFs), and the funds have continued to perform extremely well in the run-up to their anniversary.
According to data from SoSoValue, Bitcoin ETFs maintained a positive weekly inflow rate, generating $307.2 million in the week ending January 10, 2025.
The inflows remained positive despite two days of outflows totaling over $700 million, with the funds managing to attract over $1 billion in net inflows in the previous days.
The top performers, Blackrock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Trust (FBTC), led the way in inflows and outflows, having a significant impact on the week’s numbers.
A Year Later
Now that the funds have had a year to compete for dominance, it’s abundantly clear that IBIT and FBTC are outperforming the competition.
To date, IBIT has seen cumulative net inflows of $37.67 billion, creating a massive $52.76 billion in net assets, representing 2.81% of Bitcoin’s market cap. FBTC has attracted cumulative net inflows of $12.16 billion, creating a $19.5 billion Bitcoin inventory.
Of the 12 funds, only one, Grayscale Bitcoin Trust (GBTC), has seen negative cumulative net inflows. Previously the largest Bitcoin ETF by assets under management (AUM) at launch, GBTC has seen $21.57 billion in exits from its fund.
In total, the 12 funds have amassed $107.64 billion in net assets, representing roughly 6% of Bitcoin’s market cap. At this rate, there’s a chance the funds could amass 10% of Bitcoin’s supply by the end of 2025.
