The leading cryptocurrency, Bitcoin, experienced a brief surge above the $90,000 mark during morning trading sessions, generating excitement among investors. However, it faced a significant decline later in the day.
Initially climbing to over $90,200 with an increase of 3.1% in the early hours, Bitcoin subsequently dropped back below $88,000.
This volatility was not exclusive to Bitcoin; Ethereum also saw fluctuations. It rose by as much as 4%, surpassing the $3,000 threshold before retracting its gains and entering negative territory.
While Bitcoin’s sideways trend prior to Christmas was notable, the S&P 500 index—an indicator of US stock market performance—achieved record closing levels during this timeframe. Conversely, the cryptocurrency sector continues to grapple with repercussions from a sell-off that commenced in October and led to around $19 billion being liquidated from leveraged positions. As a result of this turmoil, Bitcoin remains below its starting level for 2025.
Crypto analyst Simon Peters remarked on the sluggish nature of crypto markets throughout the holiday season. He noted that tomorrow’s release of minutes from December’s Federal Reserve meeting could serve as an important catalyst for potential market recovery since these minutes may provide insights into possible interest rate reductions by Fed officials.
Despite cautious investor sentiment prevailing since October, there are signs indicating a gradual shift in market attitudes. Sebastian Bea from ReserveOne Inc. commented that today’s uptick “might have resulted from short-term individual investors boosting their futures positions.”
*This is not investment advice.