TLDR:
- Bitcoin fell 10% to $94,645 in the week ending December 22, its first major weekly decline since Trump’s election
- The drop came after the Fed cut its projected rate cuts for 2024 from five to two
- Bitcoin has previously rallied for six of the seven weeks since Trump’s victory, hitting an ATH of $108,135
- Technical indicators suggest a potential further decline to the support level around $92,000
- Property firms Bitvise and VanEck maintain bullish 2025 forecasts of $180,000 to $200,000
Bitcoin suffered its first major weekly price drop since Donald Trump’s November election victory, falling 10% to $94,645 for the week ending December 22, 2024. The drop marked a stark contrast to the cryptocurrency’s recent bullish trend that pushed it above 100,000 dollars.
The price correction erased about $10,500 from the value of bitcoin, which started the week at $105,185. The decline followed the latest policy from the Federal Reserve, which reduced its projected interest rate cuts for 2024 from five to two, following its third consecutive rate cut.
BTC price
The Federal Reserve’s updated projections indicate that the federal funds rate could drop closer to 3.9% in 2025, up from the previously expected 3.4%. This adjustment creates a less favorable environment for risk-oriented assets, including Bitcoin and other cryptocurrencies.
Prior to this drop, Bitcoin had shown remarkable strength, posting gains in six of the seven weeks following Trump’s election victory. The only previous decline during this period was minimal, with a move of 0.78% to $97,280 in the week ending November 24.
Technical analysis suggests potential further downside, with identified support levels around $92,000. The Moving Average Convergence Indicator (MACD) shows persistent selling pressure, while the On-Balance Volume (OBV) continues to decline along a descending trend line.
Market watchers note that the recent spike to the high of $108,135 on December 17 may have been a false breakout, as it was not supported by a corresponding increase in volume. This technical weakness contributed to the current price correction.
Cryptocurrency markets are closely watching the $92,100 level, which analysts see as key to Bitcoin’s short-term direction. A bounce from this price point could sustain the overall bullish structure of the market, while a breakdown could lead to a further decline towards the $88,900-$89,700 support zone.
Despite the current price weakness, major asset managers maintain an optimistic long-term outlook. Bitvise and VanEck predicted bitcoin prices in the range of $180,000 to $200,000 by 2025, citing potential catalysts such as the U.S. strategic bitcoin reserve and increasing institutional adoption.
The political landscape may also influence Bitcoin’s future trajectory. Trump’s administration nominees include several crypto-friendly figures, including hedge fund manager Scott Bessent for Treasury Secretary and Cantor Fitzgerald CEO Howard Lutnick for Commerce Secretary.
The cryptocurrency community is anticipating regulatory changes under the proposed leadership of Paul Atkins, who is slated to replace Gary Gensler as SEC chairman on January 20. Atkins, who previously served as SEC commissioner from 2002 to 2008, is known for his pro-crypto stance.
In retrospect, Bitcoin’s journey to 2024 has been remarkable. Since trading around $43,610 on Christmas Day 2023, the cryptocurrency has more than doubled in value, even after the recent correction.
Trading volume showed recent weakness, with daily activity falling 4.18% below $50 billion. The market also witnessed the liquidation of long positions of $40 million in a 24-hour period, indicating that leveraged traders were forced to close positions.
The cryptocurrency’s price action has attracted increased attention from both retail and institutional investors. The approval and launch of spot Bitcoin ETFs earlier this year marked a key milestone for mainstream adoption.
Current market conditions suggest that a period of consolidation may be necessary before Bitcoin attempts to recapture its recent highs. The price is currently hovering around $96,073, representing an 11% decline from its all-time high.
