Bitcoin (BTC) experienced significant volatility on Tuesday, dropping 4.8% to $97,000 once again after briefly surging above $100,000 to start the week.<\/p>\n
Major crypto stocks, including Coinbase and MicroStrategy, also saw sharp declines, falling more than 7% and 9%, respectively. Bitcoin mining companies<\/a> such as Mara Holdings and Core Scientific were not spared either, each dropping around 5%.<\/p>\n According to recent reports<\/a>, the downturn in Bitcoin\u2019s price coincided with a sudden spike in the 10-year US Treasury yield. This increase followed data from the Institute for Supply Management (ISM), which indicated faster-than-expected growth in the US services sector for December.\u00a0<\/p>\n This news has raised concerns about persistent inflation, which tends to pressure growth-oriented risk assets like cryptocurrencies. Historically, rising Treasury yields have had an inverse relationship with risk assets such as Bitcoin.\u00a0<\/p>\n On Monday, Bitcoin had traded above $102,000 and is widely anticipated to double this year, contingent on clearer regulations that could bolster digital asset prices<\/a>. However, uncertainty surrounding the Federal Reserve\u2019s (Fed) interest rate cuts poses potential challenges for Bitcoin\u2019s price trajectory.\u00a0<\/p>\n In December, the Fed indicated that while it was cutting rates for a third time, the pace of future cuts might be slower than investors had hoped. Rate cuts typically support Bitcoin prices, whereas hikes tend to exert downward pressure.<\/p>\n Analysts further attribute the recent dip not only to rising yields but also to increasing correlations between Bitcoin and traditional equities, particularly the Nasdaq.\u00a0<\/p>\n Bob Wallden, head of trading at digital-assets firm Abra, noted that the ISM data triggered a selloff in equities that spilled over into the crypto market.\u00a0<\/p>\n Wallden suggests that this decline was compounded by profit-taking<\/a> and stop-loss triggers for traders who had gone long on Bitcoin above the $100,000 mark.<\/p>\n Adding to the market\u2019s volatility are renewed headlines surrounding President-elect Donald Trump\u2019s shifting stance on tariff discussions, which have further fueled cautious sentiment in the Bitcoin market.\u00a0<\/p>\n Bitcoin\u2019s record-breaking rally in 2024 began to lose momentum in late December, as investors capitalized on their profits. Optimism surrounding a pro-crypto administration under Trump had previously driven Bitcoin to an all-time high of $108,000 in December.\u00a0<\/p>\nBitcoin Prices Drop Amid Rising Treasury Yields And Economic Concerns<\/h2>\n
Investors Cash In As 2024 Highs Fade<\/h2>\n