Is the Bitcoin bull market over? Four Experts on What’s Driving Cryptocurrency’s Volatile Journey – DL News

When Bitcoin jumped above $100,000 in December, analysts predicted much higher milestones ahead.

Not achieved.

Instead, Bitcoin has fallen 13% from its peak of $108,135 two weeks ago.

Sober analysts now say market sentiment has turned weak as cryptocurrency trading volume plunges 64% to a seven-week low.

This does not mean that the bull market is over.

No exception

“The current low volume and erratic price movement is not unusual at the end of the year across asset classes, and cryptocurrencies are no exception,” said Ed Hendy, chief investment officer at investment management firm Tyr Capital. DL News.

“This is a short-term correction that should be reversed quickly in the first quarter of 2025,” Hindi said.

Not everyone agrees with this position.

BitMEX founder Arthur Hayes has turned bearish once again.

In his latest macroeconomic forecast, Hayes said there is a misalignment between cryptocurrency investors’ expectations and what will come in President-elect Donald Trump’s second term in the White House.

“The market will immediately wake up to the fact that Trump has one year at best to enact any policy change on January 20 or thereabouts,” Hayes said. books On his blog.

“This realization will lead to a fierce sell-off in cryptocurrencies and other Trump 2.0 stock trades.”

“This latest decline is a healthy continuation of Bitcoin’s broader rally.”

— Ilya Utyshchenko, CEX.io

Then again, said Ilya Utyshchenko, chief analyst at cryptocurrency exchange CEX.io DL News The current decline is typical for Bitcoin.

“This latest decline serves as a healthy continuation of Bitcoin’s broader rally,” Utyshchenko said.

“The sustainability of the rise will be more in doubt without this correction [and] Double-digit declines are normal during Bitcoin’s post-halving bullish rallies.”

Falcons axis

Shortly after Bitcoin peaked above $108,000, US Federal Reserve Chairman Jerome Powell spooked investors by saying that the Fed was… It is considering smaller interest rate cuts next year.

Otychenko said that updated interest rate cut forecasts from the Fed were presented An incentive to correct the crypto market.

“[It] “It left a bitter aftertaste for the year and provided the long-awaited impetus for a market pullback,” Utyshchenko said. DL News.

The market has reacted before Erasing most of its gains in December It has been up and down ever since.

Hindi said the Fed’s apparent hawkishness has slowed the bullish momentum of high-risk assets such as Bitcoin and other cryptocurrencies.

“Long-term bitcoin holders used this as an excuse to take partial profits,” Hindi said.

The Fed Chairman’s speech may not be the only driver.

Market analysts also pointed to tax loss harvesting as the reason for the recent market decline.

Investors use tax loss harvesting as a safe haven scheme by using huge investment losses to offset capital gains taxes.

Bull market 2025

Despite these risk factors, market watchers are still betting on a continued bull market for Bitcoin and cryptocurrencies.

On-chain data from cryptocurrency analytics provider CryptoQuants shows a massive increase in Bitcoin accumulation by whales – wallet entities that own at least 1,000 Bitcoin.

Moreover, CryptoQuant analysts also noticed Bitcoin inflows to exchanges decreased to its lowest levels since 2016.

Meanwhile, stablecoin volume on Binance, the largest cryptocurrency exchange, rose to a new all-time high 31 billion dollars.

“An increase in stablecoin reserves usually indicates increasing buying pressure [and] CryptoQuant analysts said investors remain active in the market.

Crypto market drivers

• Bitcoin rose 0.7% over the past 24 hours to $94,078.
• Ethereum price fell 0.3% over the same period to $3,389.

What we read

Osato Afan Nomayo He is our DeFi correspondent based in Nigeria. It covers DeFi and technology. Got a tip? Please contact him at osato@dlnews.com.