Bitcoin (BTC) erased its entire early 2025 surge on Wednesday as macroeconomic jitters and the global bond selloff accelerated the selloff in cryptocurrency prices.
The largest cryptocurrency fell to a session low of $92,600 during US trading hours, losing nearly 10% in two days from its Monday high above $102,000. It has recovered some of the losses and recently traded at $94,300, still down 2.5% in the last 24 hours.
Cardano’s ADA, Render’s RNDR and Aptos’ APT led losses in the broad-market CoinDesk 20 benchmark index, which fell more than 3% over the same period.
The violent two-day crash wiped out nearly $1 billion in leveraged derivatives positions in cryptoassets, predominantly long positions betting on higher prices, CoinGlass data shows. The drop also pushed BTC temporarily below where it started the year. At the recent price, it is up 1% since its opening on January 1.
Cryptocurrency-related stocks were not spared. Several bitcoin miners, including TeraWulf (WULF), Bit Digital (BTBT), Bitdeer (BTDR), IREN (IREN), and Hut 8 (HUT), suffered drops of 5% to 8%. Medical device producer Semler Scientific, which adopted a BTC treasury strategy following in the footsteps of MicroStrategy (MSTR), was down almost 10% on the day and is now down more than 15% on the week and about 40% since its maximum at the end of December. MSTR was down 2.2% on Wednesday.
Several analysts warned cryptocurrency traders of a treacherous January, with potential macroeconomic headwinds for risk assets ahead, including an hawkish Federal Reserve, rapidly rising long-term government bond yields, sticky inflation readings and the possibility of a US government shutdown. What appeared to drive the pullback across assets was strong US economic data on Tuesday that caused investors to lower their expectations for rate cuts for the year.
Notably, Federal Reserve Governor Christopher J. Waller spoke Wednesday in favor of further interest rate cuts later in the year and allaying fears of inflation due to possible tariffs enacted by the incoming president. Dinald Trump. However, that didn’t change investors’ interest rate outlook much, as CME FedWatch showed.
Released Wednesday afternoon during U.S. time, minutes from the Federal Reserve’s most recent policy meeting showed a majority believed upside risks to inflation had increased and also evidenced some concern that Trump’s tariff policy could have more effect on price levels than previously assumed.
Is Bitcoin Rebound Coming?
With Wednesday’s drop, bitcoin returned to the lower limit of its range in which it has been trading since late November. BTC is likely to see a bounce off the lows in the coming days, but prices could continue to consolidate within the range and possibly pull back to lower levels before setting new all-time highs, according to follower cross-asset trader Bob Loukas, founder of Station3. NEW YORK.
“It doesn’t have to be very bearish, but we may have to play around with a range and get more comfortable with $100,000 prints before we can really leave this area behind,” he said in an X post.
Friday’s US non-farm payrolls data report and the Federal Reserve meeting later this month will influence BTC’s trajectory, hedge fund QCP noted in a Telegram broadcast, forecasting a rebound to as Trump’s January 20 inauguration approaches.
“With growing market anticipation, we believe bitcoin’s pullback is simply a pause, setting the stage for a bullish rally as Trump’s inauguration fuels optimism,” QCP analysts said.
