Bitcoin, the world’s leading cryptocurrency, has steadied around $95,000 after experiencing a significant drop in the last week of 2024.
The price of Bitcoin stabilized at around $95,000 as it had an extreme fall during the last week of 2024. The reason behind it was trader anxiety over the regulatory framework that President-elect Donald Trump’s administration is going to introduce. Although he has assured to relax regulations on cryptocurrencies, the ambiguity regarding his policies has led to profit-taking as Bitcoin rose by 100% during 2024, especially post Trump’s win.
Bitcoin Price Analysis: Bumpy Road AHEAD
Bitcoin had a bumpy last week of 2024. Having already posted an all-time high of more than $108,000 in early December, it could not sustain that level and plummeted sharply. Through the early hours of January 2, 2025, Bitcoin had managed to recover to $95,469, or up 1.8%.
The Rally and the Fall: Most of the rally going into 2024 was based on optimism by investors about the new regulatory environment that would emerge under the regime of President Donald Trump. Many traders believed that the promise by Trump of more crypto-friendly regulations would turn the trick for Bitcoin and the rest of the cryptocurrencies. At the end of the year, however, uncertainty over the specifics of Trump’s crypto policies dampened investor interest, creating profit-taking.
Concerns Over Trump’s Policies: There have been concerns that Trump’s policies would be inimical to the sector’s interests. However, the pro-crypto nature of his appointment of regulatory persons was a very positive signal to the sector. The other policies, such as the Strategic Bitcoin Reserve, remain unclear. Consequently, Bitcoin began going below the psychological mark of $100,000 in the last days of the year 2024. Issues with regulations could still be an issue when Trump assumes office fully in January 2025. This is a wait-and-watch for traders.
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Effect of Market Sentiment and Fed Policies on Bitcoin
Besides the regulatory issues, the general market conditions also affected the performance of Bitcoin. The interest rates stance of the Federal Reserve in 2025 increased the risk-aversion sentiments among investors due to the more cautious approach followed by the monetary authority. On the other side, the White House transition also kept the policymakers busy, resulting in the postponement of rate cuts on persistent inflation and a change at the White House.
In any event, high interest rates rarely go well with speculative investments, and this is exactly the case with cryptocurrencies. With the cost of capital borrowed thus rising directly to limit the available amount for investment in the riskier asset classes, the lack of steam for both Bitcoin and other altcoins since the beginning of this period with this market uncertainty had been seen.
Altcoins Still Catching Up on Lost Ground since December
Altcoins have been on the recovery trail, though Bitcoin ended 2024 in a bit of a rocky state. Ethereum gained 2.1% to $3,411, while XRP shot up 13.7% to $2.39. Other altcoins like Solana, Cardano, and Polygon also reported gains between 6% and 10%.
DOGE recovered 5 percent within the space of meme coin; the uptick generally portrayed market rebound and rebound. Amid the volatility in bitcoin, altcoin remained quite solid. Several coins witnessed positive increases based on interests and increased participation of investors.
Conclusion: The end price action for Bitcoin by 2024 points out that any regulatory news has an impact, as well as macroeconomic conditions, on the cryptocurrency markets. Although still at $95,000, this volatility will not take long before it blows up due to policies from President Trump for 2025 and those of the Federal Reserve for 2025, which are completely unknown.
For the traders and investors, being updated on the regulatory developments while adjusting to the new market sentiment in the coming months will dictate the navigation route. It might be too early to see which way cryptocurrencies could respond to a changing economic or political pressure into 2025, but to date, at least, the markets remain extremely volatile to global issues and uncertainty arising from regulations.
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