Bitcoin Price Drops Amid Economic Uncertainty and Fear in the Market
Bitcoin’s price fell to $77,494 on Monday due to inflation and recession fears, recovering slightly to $79,290. President Trump’s tariffs sparked market concerns, contributing to an overall 14.2% decline over the past week. The crypto market has lost about 25% of its cap since December, reflecting widespread sentiment of extreme fear amidst disappointing developments from the White House Crypto Summit.
The price of Bitcoin plunged by 5.6%, closing at $77,494 on Monday, influenced by mounting fears surrounding inflation and a potential recession in the United States. Although there was a slight recovery to $79,290, the significant drop reflects the market’s response to economic uncertainties, heightened by President Trump’s comments regarding his tariff policies towards key global partners, which raised concerns about financial stability.
Over the last week, Bitcoin has dropped 14.2%, returning to pre-election price levels, coinciding with unmet expectations from the recent White House Crypto Summit. The sentiment in the crypto market is grim, with the fear and greed index indicating “extreme fear” at a low of 17, the weakest reading since mid-2023.
Other cryptocurrencies have mirrored Bitcoin’s downturn, with Ethereum trading below $2,000 for the first time since November 2023, experiencing an 8.2% decline in just 24 hours. Additionally, XRP fell by 4%, while Solana (SOL) and Cardano (ADA) faced greater declines of 7% and 8%, respectively, as investors opted for less volatile assets.
Industry experts, including BTC Inc. CEO David Bailey, speculate that the U.S. Department of Justice could be liquidating seized Bitcoin assets, possibly influencing market trends. This follows an executive order by President Trump to establish a Bitcoin reserve using confiscated assets, which has led to expectations not being met regarding additional purchases of cryptocurrency by the government.
Moreover, investor discontent emerged from the government’s announcement that it will not pursue further cryptocurrency acquisitions, only managing seized assets from illegal activities. This decision failed to create the expected demand in the market, as highlighted by Haider Rafique, a representative from crypto exchange OKX. The broader crypto market capitalization has diminished by approximately 25% since December, driven by the Federal Reserve’s signaling of fewer interest rate cuts in 2025 and underlying economic factors affecting market sentiment.
In summary, Bitcoin’s price decline correlates with economic uncertainties and market reactions to political commentary. The drop in market capitalization and the movement towards less risky assets reflect a significant shift in investor sentiment. As traders remain cautious, they await decisive macroeconomic indicators and government policies to inform their strategies moving forward. Overall, the cryptocurrency landscape currently projects a state of apprehension and volatility, impacting all major digital assets.
Original Source: moneycheck.com
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