Cryptocurrency prices are experiencing a rough Monday due to poor US macroeconomic data and rampant profit-taking.
Bitcoin (BTC) has fallen 1.8% in the last 24 hours to $91,800, a price not seen since December 5, the day it surpassed $100,000 for the first time. The largest cryptocurrency has fallen more than 14% from its December 17 record of $108,278.
Ether (ETH) has lost less, falling 0.7% to $3,320, although it is now 17% below its December highs and has yet to surpass the record high of $4,820 it reached in 2021. Solana (SOL) It is also proving to be a bit stronger than bitcoin. with the SOL/BTC ratio up 0.35% today.
The CoinDesk 20, an index of the top 20 cryptocurrencies by market capitalization, excluding stablecoins, memecoins and exchange coins, is also in the red, down 3.74%. Ripple (XRP) and Stellar (XRM) have taken the biggest hits, falling 6% and 6.3% respectively, while the most resilient currency, other than ether, has been Litecoin (LTC), which is a 1.9% lower.
Shares of cryptocurrency-related companies were also affected. MicroStrategy (MSTR) and Coinbase (COIN) fell 7% and 5.3%, respectively, and major bitcoin mining companies such as MARA Holdings (MARA) and Riot Platforms (RIOT) fell more than 7%.
The selling pressure is partly due to investors withdrawing money after Bitcoin soared more than 117% this year. Profit taking is currently over $1.2 billion on a seven-day moving average, and while that’s significantly lower than the Dec. 11 high of $4 billion, it’s still much more than usual. Furthermore, most of the profits go to investors who have held bitcoins for many years.
The macroeconomy is also weighing on the market, with the US Chicago PMI – which measures the performance of the manufacturing and non-manufacturing sector in the Chicago area – showing its lowest reading since May, suggesting that a economic slowdown.
Uncertainty around the Federal Reserve’s interest rate policy going into 2025 is not helping, as the US central bank has signaled it will suspend rate cuts until at least March. The inauguration of President-elect Donald Trump, scheduled for January 20, may also be playing a role. The S&P 500, Nasdaq and Dow Jones have lost more than 1%.
“The market exceeded expectations in 2024, but signs of exhaustion signaled the need for consolidation,” Joe Carlasare, partner at Amundsen Davis, told CoinDesk. “Looking ahead to 2025, I am optimistic, but I expect the path to diverge from consensus, as markets tend to do. Bitcoin adoption continues to grow and I anticipate it will generally move in line with traditional markets. If the United States avoids a significant growth slowdown, bitcoin should do well, although the ride may be bumpier than in 2024.”
