(Bloomberg) — Bitcoin pared earlier losses after capping its first weekly decline since Donald Trump’s election victory, while many smaller tokens rose on the day.
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The largest digital asset was down 1.2% at around $93,962 at 4:39 p.m. in New York after falling 2.8% the previous Monday. It has plummeted about 13% since its last record on December 17. A broader indicator of the cryptocurrency market, encompassing smaller tokens such as Ether and meme crowd favorite Dogecoin, reversed losses and traded up more than 1%. Dogecoin itself rallied almost 4%.
The cryptocurrency market has been tossed between optimism about a friendlier regulatory environment under the incoming Trump administration and concerns that persistently high inflation will slow the pace of interest rate cuts by the Federal Reserve. Monday’s rally coincided with Republican Senate Majority Leader John Thune’s announcement of committee assignments for the next Congress, including the selection of Sen.-elect Bernie Moreno, a pro-cryptocurrency Ohio Republican, to the House Banking Committee.
Bitcoin is coming off its first weekly drop since Trump was elected, falling 7.5% in the seven days through Sunday. The Federal Reserve on Wednesday made a third straight interest rate cut while signaling a slower pace of monetary easing next year to keep inflation in check, sending global stocks into a tailspin. The aggressive turn also dampened speculative spirits unleashed in the cryptocurrency market by Trump’s promise to implement friendly regulations and his support for a national Bitcoin reserve. A record outflow from U.S. exchange-traded funds that invested directly in Bitcoin last week will weigh on prices in the near term, said Sean McNulty, chief operating officer at liquidity provider Arbelos Markets.
“We should hold the $90,000 level for Bitcoin through the end of the year, but if we fall below that it could trigger more sell-offs,” McNulty said, adding that “significant short-covering” was seen in the Bitcoin market last week. options with big buyers for January. February and March involve strikes of between 75,000 and 80,000 dollars.
Choppy near-term price action ahead of a “bullish trajectory” in the first quarter of 2025 remains the “most likely scenario,” David Lawant, head of research at cryptocurrency broker FalconX, wrote in a note.