Bitcoin News – Solana Outperforms Bitcoin in Latest Crypto Selloff: What Investors Should Know
Bitcoin News – The cryptocurrency market is experiencing a rocky start to the week, as poor U.S. macroeconomic data and rampant profit-taking weigh on prices. Bitcoin (BTC), which recently surpassed $100,000, has dropped by 1.8% over the past 24 hours to $91,800. This is the lowest price seen since December 5, when Bitcoin first broke through the $100,000 mark. Bitcoin’s current value is now more than 14% below its December 17 all-time high of $108,278.
Ether (ETH) has fared slightly better, dropping by 0.7% to $3,320, though it is still down by 17% from its December highs. Despite its recent struggles, ETH remains significantly below its peak of $4,820 from 2021. Solana (SOL) has also outperformed Bitcoin, with its SOL/BTC ratio up by 0.35% today, signaling stronger relative performance against the leading cryptocurrency.
CoinDesk 20 – the index tracking the top 20 cryptocurrencies by market capitalization, excluding stablecoins, memecoins, and exchange coins – is also in the red, sliding by 3.74%. Among the biggest losers are Ripple (XRP) and Stellar (XLM), which are both down by around 6%. The most resilient coin outside of Ether has been Litecoin (LTC), which is down by just 1.9%.
Crypto-Related Stocks Also Hit Hard
The downturn in cryptocurrency prices is affecting not only digital assets but also the stocks of crypto-related companies. MicroStrategy (MSTR) and Coinbase (COIN) have seen their stock prices drop by 7% and 5.3%, respectively. Leading bitcoin mining firms, such as MARA Holdings (MARA) and Riot Platforms (RIOT), have suffered more than 7% declines as well.
Profit-Taking Drives Market Correction
A major driver behind the selling pressure is profit-taking, as many investors look to cash out following a 117% increase in Bitcoin’s price this year. Profit-taking volumes currently exceed $1.2 billion on a seven-day moving average. While this figure is much lower than the peak of $4.0 billion on December 11, it remains significantly higher than usual. Interestingly, the majority of these profits are being realized by long-term Bitcoin holders, who have seen substantial gains over the years.
Macroeconomic Factors Weigh on Market Sentiment
On top of profit-taking, macroeconomic conditions are contributing to the downturn in the cryptocurrency market. The latest U.S. Chicago PMI data, which measures the performance of the manufacturing and non-manufacturing sectors in the Chicago area, has shown its lowest reading since May. This suggests that a slowdown in the U.S. economy may be underway, further dampening investor sentiment.
Adding to the uncertainty is the Federal Reserve’s interest-rate policy, which has created unease going into 2025. The U.S. central bank has signaled that it will pause rate cuts until at least March, leaving investors uncertain about future monetary policy. Additionally, the upcoming inauguration of President-elect Donald Trump on January 20 is adding another layer of unpredictability. The traditional stock markets have not been immune to these pressures, with the S&P 500, Nasdaq, and Dow Jones all down by more than 1%.
Looking Ahead: Mixed Outlook for Bitcoin and Cryptos
Despite the market’s recent pullback, some analysts remain optimistic about the long-term prospects of Bitcoin and the broader crypto market. According to Joe Carlasare, partner at Amundsen Davis, the market in 2024 exceeded expectations but has now shown signs of exhaustion, signaling a need for consolidation. Looking ahead to 2025, Carlasare expects Bitcoin to generally move in line with traditional markets, assuming the U.S. economy avoids a major slowdown. While the ride may be bumpier than in 2024, he believes that Bitcoin’s adoption continues to grow, which could support future price appreciation.
As Bitcoin and other major cryptocurrencies face these headwinds, investors will need to carefully consider market dynamics, including both macroeconomic factors and ongoing profit-taking behavior. The path forward remains uncertain, but with increasing adoption, cryptocurrencies could still prove resilient in the long term.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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