(Bloomberg) — Bitcoin pared earlier losses after capping its first weekly decline since Donald Trump’s election win, while several smaller cryptocurrencies turned higher during the day.
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The largest digital asset fell 1.2% to about $93,962 at 4:39 pm in New York after falling 2.8% earlier on Monday. It is down nearly 13% from its last record on December 17. A broader cryptocurrency market gauge, which includes smaller tokens like ether and meme-favorite Dogecoin, reversed losses to trade more than 1%. Dogecoin itself is up nearly 4%.
The cryptocurrency market has been oscillating between optimism about a friendlier regulatory environment under the incoming Trump administration and concern that stubbornly high inflation will slow the pace of interest rate cuts by the Federal Reserve. Monday’s rebound coincided with Senate Majority Leader John Thune’s announcement of committee appointments for the next Congress, including the selection of Senator-elect Bernie Moreno, a cryptocurrency-friendly Republican from Ohio, to the chamber’s banking committee.
Bitcoin is coming off its first weekly decline since Trump’s election, falling 7.5% in the seven days through Sunday. The Federal Reserve on Wednesday made a third straight interest rate cut while signaling a slowing pace of monetary easing next year to keep inflation under control, sending global stocks lower. The hard-line pivot has also dampened the speculative spirit unleashed in the cryptocurrency market by Trump’s pledge of friendly regulations and his support for a national Bitcoin stock. A record outflow from US exchange-traded funds investing directly in Bitcoin last week will weigh on prices in the near term, said Sean McNulty, director of trading at liquidity provider Arbelos Markets.
“We should hold the $90,000 level for Bitcoin until the end of the year, but if we break above that level it could lead to further liquidation,” McNulty said, adding that “significant negative hedging” was seen in the options market last week with major January buyers. February and March put between $75,000 to $80,000 in strikes.
Volatile near-term price action ahead of an “upward trajectory” in the first quarter of 2025 remains “the most likely scenario,” David Lawant, head of research at crypto brokerage FalconX, wrote in a note.
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