Cryptocurrency prices are having a rough Monday due to poor US macroeconomic data and widespread profit-taking.
Bitcoin (BTC) fell 1.8% in the past 24 hours to $91,800, a price not seen since December 5, the day it topped $100,000 for the first time. The largest cryptocurrency has fallen more than 14% from its Dec. 17 record high of $108,278.
Ether (ETH) lost less, falling 0.7% to $3,320, although it is now 17% below its December highs, and has still not surpassed the record high of $4,820 which it reached in 2021. Solana (SOL) 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) suffered the biggest hits, down 6% and 6.3% respectively, while the most resilient coin besides Ether was Litecoin (LTC), which is down 1.9%.
Stocks of crypto-related companies have also been affected. MicroStrategy (MSTR) and Coinbase (COIN) fell 7% and 5.3%, respectively, and major Bitcoin mining companies like MARA Holdings (MARA) and Riot Platforms (RIOT) fell more than 7%.
The selling pressure is partly caused by investor withdrawals after bitcoin soared more than 117% this year. Profit taking currently exceeds $1.2 billion on a seven-day moving average, and while this is significantly lower than the December 11 peak of $4.0 billion, it is still significantly higher than usual. Moreover, the lion’s share of profits goes to investors who have held bitcoins for many years.
Macroeconomic metrics are also weighing on the market, with the Chicago US PMI – which measures the performance of the manufacturing and non-manufacturing sector in the Chicago area – posting its lowest level since May, suggesting that an economic slowdown is in progress.
Uncertainty surrounding the Federal Reserve’s interest rate policy through 2025 doesn’t help, as the U.S. central bank has signaled it will suspend rate cuts until at least March. The inauguration of President-elect Donald Trump, scheduled for January 20, could also play a role. The S&P 500, Nasdaq and Dow Jones are down more than 1%.
“The market outperformed 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 deviate from consensus, as markets often do. Bitcoin adoption continues to grow and I expect it to generally evolve In line with traditional markets, if the United States avoids a significant growth slowdown, bitcoin should perform well, although the ride could be bumpier than in 2024.
