Bitcoin Moves Back to $95K as the Holiday Rally Stalls.

Interest rates, which provided significant support to asset prices throughout 2024, now appear to be creating resistance.

As global markets slowed during the Christmas holiday, Bitcoin (BTC) looked poised to break back above the $100,000 mark after briefly dipping below $93,000 earlier in the week. However, the rally lost momentum just shy of $99,800 as Asian trading kicked off on Thursday morning, with prices quickly retreating to around $95,000 within hours.

At the time of writing, Bitcoin was trading at $95,300, marking a 3.1% drop over the past 24 hours.

The broader CoinDesk 20 Index mirrored Bitcoin’s weakness, sliding 4.2% during the same period. Key altcoins such as Ethereum (ETH), Solana (SOL), XRP, Cardano (ADA), and Avalanche (AVAX) posted losses ranging between 4% and 7%.

In traditional markets, U.S. stock futures hinted at modest losses ahead of the opening bell, while gold and oil prices inched slightly higher.

Despite Bitcoin’s impressive performance this year, having more than doubled in value, recent price weakness suggests a shift in market sentiment. The tailwind from lower interest rates, which previously supported risk assets, may now be turning into a headwind.

The 10-year U.S. Treasury yield climbed to 4.63% early Thursday, nearing its yearly peak. This represents an increase of nearly 100 basis points since the Federal Reserve implemented a 50 basis-point rate cut in September.

Macro strategist Jim Bianco emphasized the unusual nature of rising long-term yields following a rate cut, calling it a rare event in modern financial history. “The bond market will continue pushing yields higher if the Fed maintains its narrative around rate cuts in 2025,” Bianco said. “If policymakers don’t adjust their messaging, bond yields could rise to levels that destabilize markets, particularly inflation expectations.”

About The Author

Admin

See author's posts