(Bloomberg) — Bitcoin pared earlier losses after edging its first weekly decline since Donald Trump’s election victory, while many smaller tokens moved higher on the day.
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The largest digital asset fell 1.2% to about $93,962 at 4:39 PM in New York, after falling 2.8% earlier Monday. It is down about 13% from its last high on December 17. A broader crypto market gauge, which includes smaller tokens like Ether and meme crowd favorite Dogecoin, reversed losses and rose more than 1%. Dogecoin itself rose by almost 4%.
The crypto market has seesawed between optimism about a friendlier regulatory environment under the incoming Trump administration and concerns that persistently high inflation will slow the pace of rate cuts by the Federal Reserve. The recovery on Monday coincided with Republican Senate Majority Leader John Thune’s announcement of committee assignments for the next Congress, including the selection of newly elected Senator Bernie Moreno, a crypto-friendly Ohio Republican, to the chamber’s Banking Committee .
Bitcoin is experiencing its first weekly decline since Trump’s election, down 7.5% in the seven days through Sunday. The Fed cut rates for a third straight time on Wednesday while announcing a slower pace of monetary easing next year to keep inflation in check, sending global stock markets into a tailspin. The hawkish pivot also dampened the speculative spirits unleashed on the crypto market by Trump’s promise of friendly regulation and his support for a national Bitcoin supply. Record outflows from U.S. exchange-traded funds that invested directly in Bitcoin last week will weigh on prices in the near term, said Sean McNulty, trading director at liquidity provider Arbelos Markets.
“We should hold the $90,000 level for Bitcoin until the end of the year, but breaking below that could lead to further liquidations,” said McNulty, adding that “meaningful downside hedging” was seen last week on the options market among major buyers for January. In February and March there are strikes of $75,000 to $80,000.
Choppy price action in the short term, ahead of a “bullish trajectory” into the first quarter of 2025, is still the “most likely scenario,” David Lawant, head of research at crypto prime broker FalconX, wrote in a note.